THE Reserve Bank of Zimbabwe has rejected all bids for the US$15 million of 91 Treasury bills auctioned last week, central bank sources said.

RBZ made US$7,7 million, just above half of what Treasury intended to sell, with bids ranging between 5,5 percent and 15 percent per annum.

The auction was the first sale of the securities since the country adopted the multi-currency system four years ago.

Treasury bills were last sold in 2008.

"All bids were rejected," said one source.

"The highest bid was 15 percent and the lowest was 5,5 percent. The majority of the bids were quoting interest rates of more than 10 percent which RBZ was not comfortable with."

No comment could be obtained from central bank governor Dr Gideon Gono last Friday.

Treasury intended to auction US$15 million in 91-day paper, but only to financial institutions on Real Time Gross Settlement and with no option to buy back.

This means only banks with adequate liquidity were supposed to tender since the paper cannot be used to borrow from the central bank. whose lender of last resort function remains inactive.

Banks were allowed to tender a minimum US$100 000 and institutions were limited to only one tender.

Analysts were doubtful if the Government would have significant "takers" for the Treasury bills as its creditworthiness is in shambles.

The country's national debt is over US$10 billion.

Before dollarisation, Treasury bills were seen as safe investment options among investors.