In a recent auction of government treasury bills, the Government of Ghana narrowly missed its target, leading to a surge in interest rates within the money market. The Bank of Ghana’s published results indicated that the government successfully secured ¢2.179 billion in bids, falling short of the target of ¢2.261 billion by a margin of 3.6%.
The auction saw a significant portion of bids, approximately ¢1.384 billion, coming from the 91-day bill. All of these bids were accepted by the Treasury. Similarly, for the 182-day bill, bids worth ¢649.39 million were tendered, with all bids being accepted. However, the sale of the 364-day bill resulted in a lesser amount, generating around ¢145.02 million.
Concurrently, the money market experienced a surge in interest rates, albeit marginally. The auction results revealed that the 91-day yield increased from 25.24% to 25.57%. The 182-day bill also saw a rise of 0.14%, bringing the yield to 27.28%. Notably, the interest rate for the one-year bill inched up to 30.49%, marking a slight increase from the previous week’s 30.30%.
The breakdown of the auction’s bids and accepted amounts is as follows:
91-day bill: Bids tendered – ¢1.384 billion, Bids accepted – ¢1.384 billion
182-day bill: Bids tendered – ¢649.39 million, Bids accepted – ¢649.39 million
364-day bill: Bids tendered – ¢145.02 million, Bids accepted – ¢145.02 million
Total: Bids tendered – ¢2.179 billion, Bids accepted – ¢2.179 billion
Target: ¢2.261 billion
The outcome of this T-bills auction suggests a challenging economic environment, as the government narrowly missed its target and interest rates experienced an upward trajectory. As market dynamics continue to evolve, the government and financial authorities may need to closely monitor these trends to make informed decisions to stabilize the economy and manage fiscal policies.