High interest rates on T-bills fails to attract investors as gov’t misses auction target
High Interest rates on government’s 91, 182 and 364 days treasury bills were not enough to attract investors as bids made by investors for the short term securities fell below its auction target of GHS 1bn.
This is the third time in a row that government has failed to achieve its auction targets for issued treasury bills.
Interest rates on the 91, 182 and 364 days were 16.7%, 17.3% and 19.7% respectively.
The increase in the interest rates can be attributed to the policy tightening by the Central Bank in response to rising inflation and currency pressures.
Government’s inability to achieve its set targets for T-Bills auction can be attributed to a number of a factors with the first being a tightening of liquidity on the interbank market and the second being the disinterest of investors in the short term instruments given the high rate of inflation which currently stands at 19.4% – the high inflation rate will “eat away” the interest rates on the T-Bills.
Per the auction results released by the Bank of Ghana, government managed to mobilize a total of GHS 775m in bids made by investors for the T-Bills, falling below it’s target by some GHS 225m.
Bids for the 91, 182 and 364 days T-Bills amounted to GHS 721 million, GHS 50 million and GHS 15 million respectively with government accepting GHS 711 million, GHS 50 million and GHS 14 million in bids made for the 91, 182 and 364 days T-bills.
Government, in its next auction – April 21 – is aiming at raising some GHS 1,932 million from the issuance of the 91, 182 and 364-day bills.
Find details of auction results below:
Auctresults-1794 by Fuaad Dodoo on Scribd
