T-Bills oversubscribed at 96 percent; interest rates fall

Latest figures from the Central Bank of Ghana have shown some high falls in treasury rates with a recorded value of 96 percent oversubscription in the recent treasury bills sales.

According to figures, the investor interest in the government’s short term securities keeps soaring high, most especially the three-month T-Bills subscription.

The figures showed that Treasury yield on the 91-day Treasury Bill fell by about 0.25 percent to 13.81 percent, and the 6-month T-Bill has gone down by about 0.08 percent to 14.01 percent causing a huge shrunk in the T-Bills sales.

The first five weeks of the New Year have seen a large oversubscription making the government’s plan to mobilize more funds achievable. Its initial plan was to mobilize up to a tune of GH¢856 million for the short term securities but ended up getting GH¢1.679 billion.

This is welcoming for the investor interest because it is securing enough funds to repay maturing loans and also finance the budget.

Data from the Bank of Ghana indicate that the Government Treasury securities were priced lower than the present rate during the early part of last year. But the latest fall in interest rates could shift to that trend.

The government got a little above GH¢1.5 billion worth of bids for the 91-day T-Bill, but accepted GH¢962 billion and also accepted about GH¢113.82 million cedis for the 6-month bill, though the bids tendered were GH¢114.77 million.

However, the government’s decision to reduce its borrowing marginally has largely led to a minimal fall in interest rate.