In February 2024, the government exceeded expectations by borrowing GH¢24.0 billion through treasury bills, marking a 29.3% increase over its target.
This surge in borrowing was propelled by strong investor interest and declining yield rates.
Investors submitted bids totaling GH¢24.1 billion, representing an 8.8% increase from the previous month, while accepted bids amounted to GH¢24.0 billion, an 8.9% increase month-on-month. This continued the government’s strategy of building a buffer for future auction shortfalls, aligning with the objectives outlined in the 2024 budget.
The government’s cumulative borrowing over the first two months surpassed its target by GH¢12.4 billion, positioning it well to achieve its 2024 buffer target of GH¢31.8 billion. Analysts note that this cumulative excess uptake in the initial months of 2024 is 23% higher than the excess uptake recorded during the same period in 2023.
Yields experienced a notable decline in February 2024, driven by robust money market liquidity despite concerns over the unexpected increase in January 2024 inflation.
The 91-day yield decreased by 131 basis points month-on-month to 27.3%, while the 182-day yield dropped by 135 basis points to 29.8%. Similarly, the 364-day yield fell by 150 basis points to 30.3%.
Analysts highlighted the tenor premium between the 91-day and 182-day bills at 247 basis points, indicating that the 182-day bill is more attractive, albeit with reinvestment risk, compared to the 364-day bill.