Zimbabwe's domestic debt hits $6 billion

Zimbabwean banks could be holding on to unsustainably high levels of government paper as it emerged that Treasury has run up an overdraft amounting to $1 billion.

It is believed that government was two weeks ago failing to honour Treasury Bills issued by the Reserve Bank of Zimbabwe on maturity worth $1.5 billion to finance the government's worsening deficit position and the state's creditors.

Investigations show that the Central Bank has also been issuing papers secretly to government creditors.

The central bank is said to be getting cash from local banks in lie of Treasury Bills to pay critical bills such as staff costs and imports.