Government's quest to reduce cost of domestic debt is paying dividend as it mobilized a little above ¢1.2 billion from the sale of Treasury bills, auctioning results from Bank of Ghana has pointed out.

That was about 4.0% oversubscription of the ¢1.175 billion target.

But it is coming just a day after the government raised ¢1.86 billion from the sale of the 7-year bond last Thursday, 17th June, 2021, signaling investor interest in economy.

Investor interest in T-bills has surged following the securing of adequate amount from the auctioning of the short term securities last Friday.

But this is coming with a lower interest cost as government is doing everything possible to keep cost of domestic borrowing down.

It secured a substantial amount for the highly patronized 91-day T-Bill at a slightly reduced cost of 12.62%. 

The cost of the 6-month (182) bill also went down marginally to 13.38%.

This turnaround from the recent mixed developments in the sale of government securities is welcoming, as it sends positive signal about the development in the economy.

The 100 basis points cut in the policy rate of the Bank of Ghana  is facilitating the downward pressure on treasury yields to help government lower its cost of funding, which is needed to help the authorities manage the country’s huge debt service burden.

For now, liquidity has improved albeit slightly on the interbank market, but coming up events will indicate whether it will last.