The government will borrow ¢1.96 billion on the treasury market this week.

This will be done via the issuance of the 91-day, 82-day and 364-day Treasury bills.

The uptake will partly be used to refinance maturing bills worth ¢1.75bn.

Some analysts and market watchers are concerned about the increased government borrowing on the treasury market. This is because of the expected increase of interest payments.

Until, yield on the treasury market falls significantly, the government will spend more to pay interest on loans.

This requires an imminent International Monetary Fund programme to provide an alternative source of funding. An alternative funding source will reduce reliance on short-term funding and enable yield compression on the Treasury bills market.

Government gets ¢1.79bn from T-bills sale

Last week, the government accepted all tendered bids, raking in ¢1.79bn.

The uptake exceeded the auction target and refinancing obligation.

Interest rates, however, shot up marginally again for the third week running, as the market corrects itself to reflect the prevailing economic condition.

According to the auction results, the yield on the 91-day and 182-day T-bills inched up slightly.

Whilst the 91-day T-bill went up by 0.05% to 19.79%, that of the 182-day bill increased to 22.47%, from 22.24% the previous week.

But the one-year (364-day) bill went down by 0.05% to 26.90%.