Interest rates on T-Bills continue to surge despite a marginal undersubscription in the recent treasury bill auction. According to auction results released by the Bank of Ghana, the yield on the 364-day treasury bill saw a notable uptick, rising from 32.50% to a striking 32.85% compared to the previous week.
Similarly, the 91-day treasury bill experienced an increase of 0.29%, reaching 28.50%, while the 182-day bill saw its yield inching up to 30.916% from 30.67% in the preceding week.
However, despite the heightened yields, the government managed to secure ¢2.499 billion from the sale of these treasury bills. This represents an approximately 2.72% undersubscription of the targeted amount, which was set at ¢2.570 billion.
Notably, a significant portion of the bids originated from the 91-day T-bills, where approximately ¢1.884 billion worth of bids were tendered. It’s worth highlighting that all the bids in this category were successfully mobilized, underlining strong demand in the short-term money market.
In the case of the 182-day treasury bill, ¢484.17 million in bids were tendered, and all were accepted, further highlighting the consistent demand for these short-to-medium-term instruments.
For the 364-day treasury bill, an offer of ¢131.16 million was received, and once again, all the bids were accepted, reflecting investor confidence in the government’s longer-term debt instruments.
Despite the government’s success in raising funds, the continued surge in interest rates raises questions about the broader economic and fiscal landscape in Ghana, as investors seek higher returns amid perceived risks.
The monetary authorities will undoubtedly be closely monitoring these developments as they navigate the intricacies of maintaining financial stability and addressing inflationary pressures in the nation’s evolving economic climate.