Government Exceeds T-bills Target After Period of Undersubscription
This achievement, after a long stretch of undersubscription, was made possible by increasing interest rates for two key instruments.

In a shift from its recent pattern of heavy borrowing, the government set a smaller target of GH¢4.565 billion in its latest treasury bill auction, slightly exceeding it by 1.07% and securing GH¢4.6 billion. This achievement, after a long stretch of undersubscription, was made possible by increasing interest rates for two key instruments.
From August through October, the government had consistently set borrowing targets around GH¢6 billion or more. However, in last Friday’s auction, it lowered the target to under GH¢5 billion, marking a significant departure from previous months. The decision to reduce the borrowing target may have been influenced by the 38.5% undersubscription recorded in a prior auction or consultations with the International Monetary Fund (IMF), which recently reviewed the economy.
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The auction results, published by the Bank of Ghana, indicate that the government intends to maintain lower borrowing levels, aiming for approximately GH¢4 billion in the next auction scheduled for Friday, October 18.
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In terms of interest rates, after reducing them in the previous auction, the government increased the rates for the 91-day bill and the one-year note while reducing the 182-day bill rate. The 91-day bill now offers 25.61%, up from 25.45%, and the one-year note rose slightly to 28.58% from 28.51%, while the 182-day bill dropped marginally to 26.90% from 26.92%.
The rise in interest rates is likely tied to the recent inflation increase from 20.4% to 21.5%. Keeping rates low would result in lower real returns for investors, potentially discouraging participation in future treasury bill offerings.
Source:thehighstreetjournal.com
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