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BusinessT-bills auction sees a 26.7% drop in interest rates as govt secures...

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T-bills auction sees a 26.7% drop in interest rates as govt secures GHS4.83Bbn

Interest rates have seen a consistent decline over the past ten weeks, with demand for treasury bills remaining robust despite potential risks.

As anticipated by analysts, interest rates have decreased to reflect the downward trend in inflation rates.

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The yield on the 91-day bill dropped by 25 basis points to 26.74%, while the 182-day bill eased to 29.24% from the previous week’s 29.49%.

Similarly, the yield on the 364-day bill decreased by 16 basis points to 29.84%.

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Additionally, the government accepted all bids totaling GH¢4.83 billion, marking a 12% oversubscription.

For the 91-day bill, bids worth GH¢2.72 billion were tendered, representing 56.3% of total bids, all of which were accepted.

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Similarly, all bids totaling GH¢919.40 million for the 182-day bill were accepted.

The same scenario occurred for the 364-day bill, with all bids totaling GH¢1.18 billion being accepted.

Sharp Decline in Yields in February 2024

Yields experienced a significant decrease in February 2024, driven by strong liquidity in the money market, which outweighed any potential risks from the unexpected increase in January 2024 inflation.

The yield on the 91-day bill decreased by 131 basis points month-on-month to 27.3%, while the 182-day bill saw a decline of 135 basis points to 29.8%. Similarly, the yield on the 364-day bill fell by 150 basis points to 30.3%.

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