The government has once again fallen short of its target in the sale of its short-term instruments to domestic investors by about GH¢1,257.90 million.
This latest data from the Bank of Ghana indicates that investors displayed reduced interest in T-bills during the last money market auction, tendering bids totalling GH¢5.3 billion against a GH¢6.55 billion target.
The majority of bids were for the 91-day bills, with all GH¢4.1 billion tendered being accepted.
The government also received and accepted total bids worth GH¢967 million from investors for the 182–day bill.
or the 364-day bill, the government accepted all the bids tendered worth GH¢231.14 million.
In all, the total amount sold at this auction saw an undersubscription by about 19.15 percent as interest rates continued to tumble on the money market averaging between 24 and 27 percent.
Per the data, interest rates surged marginally due to tightening liquidity.
The yield on the 91-day bill was 24.825%, up from 24.820 the previous week.
That of the 182-day bill was 26.764% from the preceding week’s 26.76%.
The rate of the 364-day bill was however 27.857% as against the past week’s 27.85%.
For some market analysts, this trend is largely due to the significantly large auction target and the government’s decision to keep yields stable in the last couple of weeks to reduce the cost of servicing the debt instruments going forward.
Looking ahead, the treasury is set to increase its borrowing target to GH¢4.97 billion in the next T-bill auction.
Source: Citinewsroom.com