Ghana’s money market witnessed a marginal increase in Treasury Bill rates during the latest auction held on July 28, 2023. The auction results indicated a consistent demand for government securities but reflected a slight upward trend in interest rates compared to the previous auctions.
91-Day Treasury Bill: The yield on the 91-day Treasury Bill rose by 0.32% since the previous auction, settling at 25.24% from the prior rate of 24.92%. Despite the increase, investors continued to show strong interest in this short-term debt instrument, with all bids tendered for the 91-day bill being accepted.
182-Day Treasury Bill: Similarly, the 182-day Treasury Bill saw a modest rise in yield, climbing to 27.15% from 26.81% in the last auction. This increase of 0.34% was consistent with the general trend seen in the money market. The government accepted all bids for the 182-day bill, reflecting the market’s confidence in mid-term debt securities.
364-Day Treasury Bill: Investors also demonstrated continued interest in longer-term debt, as evidenced by the results of the 364-day Treasury Bill. The yield for this bill increased slightly to 30.31%, marking a rise of 0.26% since the previous auction where it stood at 30.05%. Despite the increase in yield, the government was able to raise significant funds from the auction, with all bids for the 364-day bill being accepted.
Market Analysis: The marginal uptick in Treasury Bill rates can be attributed to various factors, including changes in monetary policy, inflation expectations, and investor sentiment. Rising interest rates on government securities could also indicate the government’s efforts to control inflation and manage its borrowing costs effectively.
Ghana’s economy has been facing various challenges in recent times, and the government’s ability to raise funds through Treasury Bills remains crucial for financing its operations and debt servicing obligations. While the increase in interest rates might signal growing concerns over fiscal sustainability, it is essential to note that Ghana’s Treasury Bills continue to attract investor interest due to their perceived safety and stability.