The government exceeded its treasury bills target by 15.4% to ¢1.72 billion in the latest treasury auction, but at the expense of keeping interest rates stable.

This is also coming despite the rising demand for the short-term instruments.

According to the auction results, government got an extra ¢350 million though it was expected to raise about ¢1.49 billion to refinance Treasury bill maturities of ¢1.37 billion.

However, the expectation was that interest rates would have fallen because of the rising demand for the short-term financial instruments.  

Again, since the government only source of borrowing, for now, is the treasury market, ideally, demand for the treasury securities should have pushed the rates a little down.

Chunk of the bids came from the 91-day T-bills, where a little over ¢1.411 billion were received at a relatively same interest rate of 35.65% from the previous week. ¢1.405 billion of the bids were however accepted.

For the 182 T-bills, GH¢311.91 million were tendered in by the investors, out of which ¢270.32 million were accepted by the government.

The yield on the 182-day bill was also virtually unchanged at 35.94%.

Analysts expect T-bill yields to decline as an expected International Monetary Fund support-programme in the first quarter of this year coupled with a stable outlook of the cedi may limit currency pass-through to inflation.