Treasury plans GHS 5.62 billion T-Bill auction amid liquidity buildup

GCB Capital Research indicates that the upcoming Treasury bill auction scheduled for Thursday, November 30, 2023, is poised to target a substantial gross issuance of GH¢5.62 billion, reflecting a notable 72% week-on-week increase. The bills, spanning durations from 91 to 364 days, aim to refinance impending maturities estimated at GH¢3.45 billion.

GCB Capital Research suggests that the Treasury is strategically building liquidity buffers, leveraging excess uptakes from recent issuances. This move is seen as a proactive measure to address both budget financing needs and liability management obligations anticipated early in 2024.

While the domestic market’s liquidity is deemed capable of supporting the targeted size at the upcoming auction, GCB Capital Research underscores a potential moderation in the expected decline of clearing yields. This projection raises considerations about the Treasury accumulating a substantial refinancing risk in the future, a factor that demands careful scrutiny and management.

This insight from GCB Capital Research provides a nuanced perspective on the Treasury’s financial maneuvers, highlighting both its proactive liquidity-building strategy and the potential challenges associated with accumulating refinancing risks in the evolving financial landscape.

Source:norvanreports