Government exceeded its Treasury bill sale target by a little above 67% as interest rates continue to fall for the third week running, albeit marginally. 

Despite the issuance of a 2-year bond last week which was highly participated by foreign investors, the weekly T-Bills sale was highly oversubscribed.

Interest rates particularly on the 91-day T-Bill once again fell because government rejected some of the bids from the investors.

This however came as a good omen for government since yield on the short term instruments went down though marginally.

Secondly, the banks that invest heavily in T-Bills will have some excess funds available for on lending to household and businesses.

According to the trading results, bids submitted were estimated at about GH¢1.29 billion, whilst government accepted GH¢767.59 million.

The target for the auctioning was GH¢773 million.

Interest rate on the 91-day T-Bill also declined by 0.12% to 13.11%, by the 182-day T-Bill rate remained same at 13.95%.

Many market analysts in November last year expressed sentiments about the need for interest rates to go down.

According to them, the reduction in the general price levels of goods and services over a period should underpin the government’s desire to push interest rates down.

This is also part of measures to reduce the domestic cost of borrowing in the midst of financing needs, triggered by the coronavirus pandemic.

2-year bond highly subscribed by investors

The government 2-year bond sale last week was highly successfully.

It accepted GH¢3.0 billion as there were immense foreign investor participation in the debt instrument.

Auction result from the Bank of Ghana showed that investors submitted a total of GH¢3.7 billion, within the Initial Price Guidance of 17.5% to 17.85%.

The government however rejected GH¢700 million of the bids tendered.