Government beats GH¢2.75 billion T-bill target despite falling rates

The government has raised about GH¢2.8 billion from the latest Treasury bill auction, slightly exceeding its GH¢2.75 billion target.

Treasury bills, commonly called T-bills, are short-term investments issued by the government to borrow money from investors. In return, investors earn a return when the bills mature.

At the latest auction, investors offered to lend the government about GH¢2.9 billion, more than the amount it planned to raise. This resulted in a 7.5% oversubscription.

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However, the interest rates on the 182-day and 364-day T-bills fell, meaning the government will pay slightly less to borrow money through those instruments.

The rate on the 182-day bill dropped by 11 basis points to 6.37%, while the rate on the 364-day bill fell from 9.98% to 9.83%.

The rate on the 91-day bill remained unchanged at 4.69%.

The 91-day T-bill attracted the highest demand, with investors submitting GH¢2.075 billion in bids. The government accepted GH¢1.879 billion.

For the 182-day bill, investors submitted GH¢702.95 million in bids, with GH¢520.57 million accepted.

The 364-day bill received GH¢876.72 million in bids, of which the government accepted GH¢497.74 million.

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The results show that investors continue to show strong interest in lending to the government, while the cost of borrowing through the longer-term T-bills has eased.

In simple terms, the government wanted to borrow GH¢2.75 billion, investors offered about GH¢2.9 billion, and the government ended up raising about GH¢2.8 billion at slightly lower interest rates on the 182-day and 364-day bills.

DR/MA

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