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Gov’t borrows almost GHc 5bn of Tbills at 31.5%

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DDEP, TBILLS

The 91, 182, and 364-day treasury bills auctioned by the Bank of Ghana (BoG) on behalf of the government, saw some GHS 4,975 million mobilised as credit from investors to the government.

The secured GHS 4,975 million (almost GHS 5 billion) was against a programmed auction target of GHS 3,587 million.

The government, in accepting the GHS 4,975 million bids tendered, exceeded its target by GHS 1,388 million.

A total of GHS 3,307m and GHS 377m bids were tendered for the 91 day and 182 day with the government accepting bids worth GHS 3,277 and GHS 375m tendered for the short-term debt securities.

For the 364-day bill, a total of GHS 1,323m was tendered with the government accepting all bids tendered for the debt security.

The oversubscription of the short-term debt securities was due to the high interest rates and near-positive returns on the debt instruments for investors.

Returns on the short-term debt instruments particularly the 364-day bill with an interest rate of 33.2% has neared positive returns (2 percentage points away from reverting to the path of positive returns) given the dip in headline inflation from 38.1% in September to 35.2% in November 2023.

Interest rates on the 91, 182, and 364-day T-Bills as of the last auction were 29.4%, 31.7%, and 33.2% respectively, resulting in an average interest rate of 31.5% across the debt instruments.

Effectively, interest rates on the 91, 182, and 364-day T-Bills on a week-on-week basis declined marginally by 0.3%, 0.1% and 0.2% respectively.

Meanwhile, in the upcoming issuance of the 91-day, 182-day, and 364-day treasury bills on December 1, 2023, the Government will be seeking to secure some GHS 5,618m in fresh funding to meet its short-term financing needs.

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