Government borrowed a total of GH¢19.90 billion through treasury bills in March 2024, marking a 17% decline from the previous month’s borrowing of GH¢23.94 billion.
The funds raised were used to refinance maturities worth GH¢14.47 billion, indicating a strategic approach to managing the country’s debt obligations.
Despite the reduced borrowing, yields on treasury bills continued to trend downwards, reflecting improved market confidence and liquidity conditions. The 91-day, 182-day, and 364-day bills closed at 26%, 28.5%, and 29.1% respectively, marking decreases of 128, 125, and 120 basis points from the previous month.
Looking ahead, analysts anticipate a more moderate decline in yields for April 2024. This cautious optimism is based on the slower disinflation process and the recent adjustment in the Cash Reserve Ratio (CRR) for banks with loan-to-deposit ratios below 55%.
The change in CRR is expected to impact liquidity levels and could influence investors’ demand for treasury bills.
Last week, demand for treasury bills fell short of the treasury’s target, as banks adjusted their cash reserves to meet the revised CRR requirements.
Despite this, the government accepted all bids, raising GH¢4.16 billion against a target of GH¢2.35 billion.
Yields continued their downward trajectory, declining by 25 basis points across all tenors. The 91-day and 182-day yields settled at 25.75% and 28.25%, while the 364-day bill closed at 28.85%.
For the upcoming week, the government aims to raise GH¢2.81 billion through the 91 to 364-day bills, primarily to settle refinancing obligations amounting to GH¢2.58 billion. This planned borrowing reflects the government’s commitment to proactive debt management and highlights its ability to navigate economic challenges effectively.
Norvanreports