T-Bills auction beats target by $36.6m

Recent treasury bill auction conducted by the Bank of Ghana on behalf of the government has surpassed expectations, raising a significant GHS 1,978 million. This achievement outperformed the planned auction target of GHS 1,575 million by an impressive margin of GHS 403 million ($36.6 million).

However, the success of the auction came at a cost to the government, as interest rates for the 91-day, 182-day, and 364-day T-Bills reached 24.3%, 26%, and 29.6% respectively. These rates reflect the premium investors demand for lending their funds to the government, considering the associated risks and uncertainties.

Looking ahead, the government has set an ambitious target of raising GHS 1,778 million in its next auction by issuing the 91-day and 182-day T-Bills. The government’s objective is to secure the necessary funds for its ongoing operations and initiatives while managing the cost of borrowing.

This strong investor appetite for Ghana’s treasury bills highlights the confidence in the country’s economic prospects, despite the recent economic difficulties. The government’s commitment to fiscal discipline, coupled with prudent monetary policies by the Bank of Ghana on the back of the IMF programme, has fostered an environment conducive to attracting investment.

As the government moves forward with its ambitious target, market participants will closely monitor the auction to assess investor sentiment and determine the potential impact on interest rates. The outcome of the upcoming auction will shed light on investors’ continued confidence in Ghana’s economy and their willingness to lend to the government.

Ghana’s success in raising funds through treasury bill auctions not only provides essential financing for the government but also serves as a barometer of the country’s overall economic health. With robust investor demand, Ghana is well-positioned to navigate the present economic challenges, pursue development initiatives, and sustain its growth trajectory.