T-Bills: Gov’t records 3.60% oversubscription, but cost of borrowing surges

The government recorded another marginal oversubscription of treasury bills, but it came at the expense of rising interest rates, with the cost of borrowing surging.

According to the auction results from the Bank of Ghana, the government raised GH¢5.825 billion from the sale of short-term instruments, surpassing its target of GH¢5.623 billion. All bids were accepted.

A staggering GH¢5.107 billion, about 87.67%, came from the 91-day bill. For the 182-day bill, GH¢560.07 million was tendered, while a little over GH¢157 million was offered for the 364-day bill.

Meanwhile, interest rates increased across the yield curve. Some analysts believe the government would have missed its target if interest rates had remained the same or decreased.

The yield on the 91-day bill rose by 26 basis points to 26.82%. The rate on the 182-day bill increased to 27.67%, up from 27.58% the previous week. The yield on the 364-day bill also shot up to 29.12%, compared with 28.97% the preceding week.

READ ALSO:

• Akufo-Addo touts unprecedented achievements in Ghana’s agriculture sector
• Cocoa producer price raised to GH₵3,100
• My commitment to business development has been consistent – Bawumia