T-bills auction: Government achieves 19.5% of target at higher cost

A latest report from the Bank of Ghana, says the government successfully attained approximately 19.5% of its target for the sale of Treasury bills.

Despite this achievement, the cost of borrowing through these domestic instruments has increased for the 15th consecutive week.

The auction received an oversubscription, likely due to the relatively smaller target amount of ¢1.77 billion.

Based on the published results by the Bank of Ghana, the government secured around ¢2.12 billion from the sale of these short-term instruments.

A chunk of the bids came from the 91-day T-bill, where ¢1.812 billion were mobilised. The government, however, accepted all the bids tendered.

Again, the government accepted all the ¢313.59 million tendered for the 182-day bill.

Meanwhile, interest rates continue to surge as the 3-month bill increased by 0.29% to 24.39%.

Also, the rate on the 182-day bill shot up to 26.40%, from the previous 26.02%.

Fast forward, analysts are concerned about the rising interest costs as it may affect the government’s quest to cut domestic interest payments.