T-Bills: Gov’t exceeds target by GHS 519m
Government secured a total of GHS 1,083 million in funds from the auction of the 91 and 182 days treasury bills.
The secured amount was some GHS 519m more than the programmed auction target of GHS 564m.
The oversubscription of the short term debt instruments can be attributed to the easing of liquidity on the interbank market.
Bids for the 91 and 182 days T-Bills amounted to GHS 824 million and GHS 259 million respectively with government accepting all bids tendered for the T-Bills.
The GHS 1,083 million secured by government however, came at increased interest rates.
The 91 and 182 days T-bills were auction at interest rates of 26% and 27.5% respectively, making it more costly for government to service its domestic debts.
The high interest rates on the T-Bills reflect the recent hikes in the Central Bank’s policy rate.
Despite the increased interest rates on government’s short term debt instruments, returns on these instruments are negative given that their interest rates fall below the country’s headline inflation of 29.8%.
IMF intervention breeds investor confidence in T-Bills issuance
The anticipated intervention of the IMF in Ghana’s current economic woes seems to be propping up investor confidence as bids made for government’s short term debt securities in the recent weeks are more than government’s auction targets.
Government, for months now has been struggling to achieve its auction targets let alone exceed its targets.
For the past months, government’s inability to achieve auction targets for its short term debt securities has been for a number of reasons key of them being investors concerns (particularly non-resident investors) over the country’s rising debt stock and its ability to service it given the country’s revenue mobilisation challenges resulting in capital flight, unattractive interest rates on T-bills due to record high inflation rates and tightening of liquidity on the interbank market.
However, given the government’s recent request to the IMF for a bailout programme, investors seem to have some renewed confidence in the economy as they expect the IMF to help the country resolve its current economic challenges.
Government is reported to be requesting for some $1.5bn in assistance from the Fund.
Auctresults-1809- by Fuaad Dodoo on Scribd
