Government misses T-bills target marginally, but interest rates surge

Government missed its Treasury bills auction target for the third week running, but liquidity improved comparatively to the past two weeks.

The government secured ¢1.23 billion from a target of ¢1.316 billion, about 6% under-subscription.

Though the government missed the target marginally, it was seeking to raise ¢1.124 billion across the 91-day to 364-day bills to refinance the upcoming T-bill maturities of ¢1.003 billion.

According to the auction results from the Bank of Ghana, the bids tendered in were estimated at ¢1.23 billion. All the bids were however accepted.

Chunk of the bids came from the 91-day treasury bills, as ¢1.073 billion were tendered in. The 182-day treasury bills also received bids worth ¢141.41 million.

According to data from the Bank of Ghana, the interest rate on the 182-day T-bill hit 34.85%, from 34.2% the previous week.

That of the 91-day bill also surged by 0.70% to 33.34%. The one-year bill sold at a rate of 34.85%, from 33.35% the prior week.

Despite a surging interest rates, there is still a negative real return between interest rates and inflation.

Inflation (September 2022) is presently hovering around 37.2%

Securities            Bids Tendered (GH¢)      Bids Accepted (GH¢)

91 Day Bill          1.073 billion       1.073 billion

182 Day Bill         141.41 million   141.41 million

365 Day Bill        21.73 million     21.73 million

Total      1.236 billion        1.236 billion

Target   1.316 billion        1.316 billion

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