The government marginally missed its treasury bill (T-Bill) borrowing target after quick investor rebound in the previous auction.
The latest auction report by the Bank of Ghana reveals that the government targeted to borrow GH¢ 6.6 billion. At the end of the auction, total bids that were tendered by investors amounted to GHC 6.4 billion representing 97.5% of the target.
Despite failing to meet the target, GH¢4.6 billion of the total bids were accepted rejecting GH¢ 1.8 billion. The accepted bids represent 70.08% of the targeted amount.
The trend on the market in recent weeks signals that investor confidence is fluctuating.
The downward trend of the interest of the bids also continued abated.
The 91-day bill saw a very marginal decline from 15.4527% to 15.4522%. The 182-day bill also declined from 16.2149% to 16.1836% while the 364-day bill also witnessed a reduction from 18.6507% to 18.6206%.
The ongoing decline in interest rates on government treasury bills aligns with the administration’s broader agenda to make borrowing more affordable. Sources within government have told The High Street Journal that the ultimate vision is to push these rates down to single digits, a milestone that would mark significant progress in fiscal management.
However, this downward trend has raised concerns at the Bank of Ghana. The Central Bank fears that continued rate reductions could increase pressure on the cedi, as investors may shift their preference toward foreign currency investments in search of higher returns. Such a shift would heighten demand for forex, potentially destabilizing the local currency.
Meanwhile, the government has planned to borrow a total of GH¢ 6.14 billion in the next auction. Analysts are keenly watching to find out how things unfold in the next auction. The government marginally missed its treasury bill (T-Bill) borrowing target after quick investor rebound in the previous auction.
