For the first time since the third week in November, sale of Treasury bills to investors have been undersubscribed in the weekly auctioning of the short-term securities.
But this time around, the under-subscription is very significant.
Right after the December 7th elections, the weekly Treasury bills sale was highly oversubscribed by about 21%.
But that has been short-lived as there has been a huge under-subscription
by investors.
Whilst government was looking for GH¢1.79 billion, it rather got GH¢971.7 million for the 91-day, 182-day and 364-day Treasury bills.
For the 3 months T-Bill, government accepted all the bids worth GH¢759.8 million, whilst it accepted GH¢154.9 and GH¢56.9 million for the six months and one year Treasury bills respectively.
Interest rate for the 91-day and 182-day T-Bills however still hover around 14.08% on the average, whilst that of the one year bill is going for 16.9%.
Analysts believe the successful sale of the 3-year fresh bond and the 20-year Treasury bond during the past week could be attributed to the lower participation of investors in the weekly T-Bills auctioning.
“There were two other offers in the same week which raised substantial sizes. I believe these dual offers provided significant competition for the T-bills. The 3-year offer, which raised GH¢1.66 billion provided the main competition at 19.25% and attracted most of the interbank liquidity for the week”, Courage Martey, Senior Economic Analyst with Databank Research told Joy Business.
Secondly, banks and retail investors may be looking to hold more cash balances ahead of the Christmas holidays. This could also have restrained investment demands and weighed on subscription at the T-bills auctions.
Meanwhile, there is an anticipated slight fall in interest rates in the coming weeks because of decline in inflation.
Interest rate ease on short-end of market
Interest rate trends on the money market reflected mixed developments as
yields on the short to medium term instruments eased, but broadly tightened at the longer end, the Bank of Ghana said in its Monetary Policy Report.
On a year-on-year basis, the 91-day Treasury bill rate declined to about
14.1% in October 2020 from 14.7% a year ago.
Similarly, the interest rate on the 182-day instrument declined to 14.1%
from 15.1%.
With the exception of the 6-year bond, yields on the 7-year, 10-year, 15-
year, and 20-year bonds all increased.
Latest Stories
-
Ford Foundation partners foster collaborative solutions for host Community Development Trusts implementation in Nigeria
5 mins -
Appiatse reconstruction: Support Bawumia to do more for Ghana – Richard Ahiagbah to Ghanaians
31 mins -
I wanted Harry Kane at Man United – Ten Hag
32 mins -
Ayorkumi: Stage play on slave trade premieres on May 11
33 mins -
Majority defends GRA-SML deal, insists no wrong was done
41 mins -
Church Of Pentecost disburses educational sponsorships worth ¢14,281,540 million
41 mins -
Money Summit: Fidelity Bank’s Atta Gyan calls for a rethink on investment strategies
56 mins -
WPL 2023/24: Battle for glory as Northern and Southern zone clubs chase playoff spots
1 hour -
Ghana’s Press Freedom Index improvement nothing to write home about – Sam George
1 hour -
Ghana Wellness and Healthcare Awards slated for June 14
1 hour -
OSP begins investigation into alleged bribery of EC staff by Kwadaso MP
1 hour -
Ghana FA laud Coach Zito with standing ovation after Dreams FC’s exploit in Africa
1 hour -
Asantehene worried over brain drain in African contemporary arts
1 hour -
Hearts of Oak legend berates current players for poor form
2 hours -
Unless EC has rules against officials receiving lunch money, nothing can be done in ‘envelope scandal’ – Prof Agyeman Duah
2 hours