T-bills: Yields drop marginally as treasury misses target by GHS232.7M

Yields on Treasury bills (T-bills) witnessed a downward trend in the latest auction, as the government fell short of its target this week by some GHS232.7 million.

The latest data from the Bank of Ghana shows that investors displayed reduced interest in T-bills during the latest money market auction – submitting bids totalling GH¢4.48 billion against a GH¢4.72 billion target.

According to figures from the Bank of Ghana, a chunk of the bids came in from the 91-Day bill. Investors tendered GHS 3.54 billion for the 3-month financial instrument, with the government accepting all.

The government also received and accepted total bids worth GHS 782 million from investors for the 182–day bill.

For the 364-day bill, the government accepted all the bids tendered worth 165.36 million.

In all, the total amount sold at this auction saw an undersubscription by about 5%, as interest rates continued to tumble on the money market averaging between 24 and 27 percent.

For some market analysts, this is largely due to the significantly large auction target relative to last week.

They also explain that liquidity levels have not been as strong post the dynamic Cash Reserve Ratio directive and people are also looking for ways to diversify away from Tbills.

They however believe that the weighted average rates for the week indicate competitive bidding and investor confidence in government securities.

Looking ahead, the treasury is set to increase its borrowing target to GHS 5.31 billion in the next T-bill auction. 

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