Gov’t misses GHS 1.86bn T-Bills auction target; first time after securing SLA deal with IMF
Government in the issuance of its 91,182 and 364 days treasury bills missed its target of raising GHS 1.86bn.
Government in the auction of the short-term securities missed its target by some GHS 61m as it managed to raise GHS 1.80bn from the debt market.
Bids for the 91, 182 and 364 days T-Bills amounted to GHS 1,131 million, GHS 510 million and GHS 183 million respectively with government accepting bids amounting to GHS 1,131 million, GHS 494 million and GHS 183 million for the 91, 182 and 364 days T-Bills respectively.
The 91, 182 and 364 days T-Bills were auctioned at interest rates of 36%, 36.3% and 36.4% respectively.
This is the first time government has missed its auction target for the short term debt instruments after securing a staff-level agreement (SLA) with the IMF.
The second was five weeks ago when Government mobilised funds in excess of GHS 2.39bn against a target of GHS 2.17bn.
In a related development, Professor Godfred Bokpin is warning of the collapse of the financial sector if government includes Treasury bills in the debt exchange programme.
He, however, does not expect the government to rope in Treasury bills into the debt exchange programme because that is its only source of borrowing.
Speaking in an interview on Joy FM, Professor Bokpin expressed unhappiness about the inclusion of individual bondholders in the debt exchange programme, describing the move as a wholesale approach.
“If you look at the financing landscape right now, that [T-bills] is the only means government has kept to sustaining itself. So I am not expecting that government will make any announcement of roping in treasury bills.
“What it means is that the regime will collapse because that is the only source of funding apart from the Bank of Ghana sustaining government on its balance sheet.”
“But the way things are going, it is very difficult to trust the government and their statement, that’s unfortunate. But for now, government will keep the window open as a way of interacting with the market”, he stated.
He added that if care is not taken the balance sheet of the banks will weaken after the programme.
“From the approach, government has adopted and the terms, by the time we are done, if government is unwilling to accommodate further revision to the terms of the domestic debt, we will systematically weaken the balance sheet of the participating financial institutions”.
“Without even introducing the debt exchange, if you do mark-to-market, government financial instrument is manifesting explicitly in income losses. And some banks may be asked to bring in additional capital or they will have to be recapitalised. If you assess the banks’ balance sheet today under IFRS 9, a number of banks will go underwater [collapse],” he remarked.
