Gov’t misses T-bills target by GHS 700m as yields remain stable

The sale of weekly treasury bills to domestic investors fell short of its target by appropriately GHS 700 million.

The reduction in the auction of the short-term instruments could largely be due to government’s decision to keep yields stable in the last couple of weeks to reduce the cost of servicing the debt instruments going forward.

Simply the treasury bills market recorded an undersubscription at the last auction.

Government missed its target after securing GHS 4.06 billion as against a target GHS 4.78 billion.

Although majority of the bids came from the 91 day bill, all of the GHS 2.4 billion which was tendered and accepted under the three month short instrument was lower than the GHS 2.9 billion tendered and accepted the previous week.

The government also received and accepted total bids worth GHS 1.18 billion from investors for the 182–day bill.

For the 364-day bill, the government accepted all the bids tendered at GHS 477 million.

In all, the total amount sold at this auction saw an undersubscription by about 19 percent as interest rates continued to remain stable on the money market averaging between 24 and 27 percent.

Market analysts suggest that the undersubscription is mainly due to the significantly higher auction target.

Looking ahead, the government plans to lower its borrowing target to 3.86 billion cedis in the next treasury bill auction.

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