Demand for Treasury bills have begun rising because of increased inflows from foreign portfolio investors.
But the government has stood behind its grounds rejecting some of the bids from the foreign inflows. This has culminated in reduction in interest rates or yields on the short term securities.
Senior Economic Analyst with Databank Research, Courage Martey tells Joy Business the trend will continue for sometime.
“Yields on treasury bills are declining but yields on government securities are declining across the curve and the main reason why we’re seeing a decline in yields for treasury securities is because there’s a heavy amount of liquidity on the market.’’
“The strong liquidity on the market has helped largely because there’s an increased inflow from foreign portfolio investors who are seeking to take advantage of our high nominal yields and very tolerable currency risk or cedi depreciation, and to the extent that the inflow persists then there’s strong supply of funds on the market.”
Meanwhile, T-Bills raked in GH¢45.31 billion in 2020. GH¢43.78 billion of the amount was used to refinance the maturing short-term securities
Government accepted all T-Bills sale worth GH¢1.32bn
Government accepted all Treasury bills sale to the tune of GH¢1.327 billion despite it being oversubscribed by 9.4%, auctioning result by the Bank of Ghana revealed.
This came on the back of a 96% oversubscription last week, though, the amount involved was lower than this just ended auctioning.
Accepting all the bids tendered, indicated, that government is really in dire need of funds to finance the budget due to the impact of the coronavirus pandemic on the economy.
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