Treasury misses GHS 3.75bn T-Bill target by GHS 414m
The Finance Ministry in the issuance of its 91,182 and 364 days treasury bills missed its target of raising GHS 3.75bn.
The Treasury in the auction of the short-term securities missed its target by some GHS 414m as it managed to raise GHS 3.34bn from the debt market.
Bids for the 91, 182 and 364 days T-Bills amounted to GHS 2,601 million, GHS 496 million and GHS 252 million respectively with Government accepting all bids made for the 91 and 182 day T-Bill with the exception of the 364 day T-Bill which it accepted GHS 248 million.
The 91, 182 and 364 days T-Bills were auctioned at interest rates of 28.1%, 29.3% and 32.1% respectively.
On average, Government’s interest cost on T-Bills stands at 29.8%.
The undersubscription of last week’s T-Bill auction may be due to the ‘fears’ or cautious stance of investors over a purported possible restructuring of the T-Bills.
The restructuring of the T-Bills is reported to be due to the little success attained in getting external creditors to restructure the country’s external debt coupled with the high and unsustainable interest rates on the short term debt instruments as the country undergoes its first review of the $3bn IMF programme this month.
Despite the high rates on T-Bills, real returns on the short-term debt instruments are still negative given that the rates are below the prevailing inflation rate of 40.1%.
Total outstanding T-Bills issued by Government as of end-August 2023 stood at GHS 55bn representing 28% of the country’s total GHS 196bn domestic debt.
With interest rates on T-Bills hovering between 28% and 32%, Government is expected to make interest payments above GHS 17bn per annum.
