This performance marks a reversal from the previous week’s oversubscription of GHS 1.35 billion, signaling a shift in market conditions. Data from the Bank of Ghana (BoG) shows that maturities for the week totaled GHS 5.12 billion.

By tenor, the 91-day bill remained the most attractive, absorbing all GHS 4.02 billion in bids. The 182-day and 364-day bills garnered GHS 867 million and GHS 508 million, respectively. Across the board, yields edged upward.

The 91-day and 182-day bills saw their yields rise by eight basis points each, settling at 27.85% and 28.57%. The 364-day bill yield inched up by one basis point to 29.94%, reflecting increasing borrowing costs.

Market observers attributed the undersubscription to heightened demand in the Bank of Ghana’s separate bill auction, which drew a robust GHS 6.9 billion in uptake.

Looking forward, analysts expect yields to remain high as the central bank continues its contractionary open market operations to control liquidity. The government’s next auction seeks to raise GHS 4.26 billion, providing a fresh test of investor appetite in a competitive market.

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According to the writ, Mr. Amable is calling for an end to treasury bill issuances that finance government operations, citing the government’s failure to secure parliamentary approval for these transactions.

He argues that this approach breaches provisions in the 1992 Constitution, warning that unchecked borrowing will continue to harm the economy.

The Attorney General of Ghana is named as the defendant, and the injunction application requests the Supreme Court to rule that the actions of the Ministry of Finance and the Bank of Ghana are unconstitutional.

The application partially reads, “The relevant borrowing contracts, conducted without parliamentary approval, are liable to be declared void for unconstitutionality. This poses a grave risk to Ghana’s financial sector, impacting banks, savings and loans companies, micro-finance institutions, asset management companies, insurance companies, pension funds, and individual investors. The state’s unconstitutional actions jeopardize the capital of Ghanaian investors and the financial sector at large.”

The filing highlights violations of Section 30 of the Bank of Ghana Act, 2002 (Act 612), and Section 61 of the Public Financial Management Act, which mandate parliamentary oversight for borrowing via temporary advances, loans from the Bank of Ghana, and the issuance of treasury bills, bonds, and other debt instruments.

Mr. Amable’s injunction request is narrowly focused on stopping new borrowing transactions and does not seek to disrupt the government’s obligations on existing debt, provided that repayments do not involve funds from new, unapproved borrowing.

Source: Adomonline

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According to the auction results by the Bank of Ghana, the government missed its target by a marginal 1.66 percent.

The government got GH¢5.203 billion from a target of GH¢ 5.319 billion.

All the bids tendered for the short-term instruments were accepted. GH¢3.725 billion, representing 71.23% were tendered for the 91-day bill.

The uptake for the 182-day T-bill was however GH¢1.251 billion. It represented about 23.93% of the total bids.

For the 364-day bill, GH¢252.74 million were tendered.

Meanwhile, interest rates eased across the yield curve in line with an anticipated decline due to the falling rate of inflation.

The yield on the 91-day bill declined by 6.0 basis points to 24.78%.

The interest on the 182-day bill also dipped to 26.68%, from the previous week’s 26.74%.

Again, the yield on the 364-day bill also declined by 4.0 basis points to 27.81%.

Source: Joy Business

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This was 17% lower than that of February 2024.

Part of the proceeds were used to refinance maturities worth GH¢14.47 billion.

Importantly, the yields remained on the downward trend, with the 91-day,182-day and 364-day closing at 26% (128 basis points lower), 28.5% (-125 basis points), and 29.1% (-120 basis points) respectively.

Analysts expect a sluggish pace in the decline of yields for April 2024, due to the slowed disinflation process and the recent increase in the Cash Reserve Ratio for banks with loan-deposit-ratios below 55%.

Last week, the demand for T-bills by investors fell below the treasury’s target, as banks with loan-to-deposit ratios below 55% prepared to increase cash reserves to the respective required levels.

The government consequently accepted all bids, raising GH¢2.35 billion against a target of GH¢4.16 billion.

Accordingly, the target and maturity coverage ratios declined, reflecting levels last seen in April 2022.

However, the yields continued to trend down with a 25 basis points decline across all tenors. The 91-day and 182-day yields settled at 25.75% and 28.25%, respectively, while the 364-day closed at 28.85%.

This week, the government plans to raise GH¢2.81 billion on the 91 to 364-day bills, to settle refinancing obligations worth GH¢2.58 billion.

This is coming after the country’s debt went up by about ¢6.3 billion between April and June 2023 to reach ¢575.5 billion.

With improved liquidity and lower refinancing pressure, analysts expect the treasury to achieve the auction target.

The Monetary Policy Committee (MPC) of the Bank of Ghana left the policy rate unchanged at 30.00% on Monday, September 25, 2023, citing the considerable decline in upside inflation pressures.  The decision leaves the cumulative hikes for this year at 300 basis points.

Databank Research said it expects the MPC decision to limit policy rate-induced pressures and squeeze the rise in T-bill yields.

Last week, investors showed firm demand in the auction, submitting total bids of ¢3.25 billion against a target of ¢2.59 billion.

T-bills were oversubscribed, as the government raised ¢3.10 billion.

Yields soared, especially the 182-day yield, which increased 129 basis points to 30.68%.

The 91-day and 364-day yields advanced to 28.50% (+38 basis points) and 32.51% (+34 basis points), respectively.

This is coming after the government obtained ¢1.72 billion from the short-term securities, from a target of ¢1.125 billion last week.

The amount achieved exceeded the auction target by 52.30%, surpassing the refinancing obligation.

Due to competitive pricing of bids and robust investor demand, yields on the 91-day and 182-day tenors retreated to 35.46% (-20 basis points) and 35.83% (-11 basis points). The 364-day yield, however, recorded an uptick to 35.92% (+2 basis points).

More than 85% of the bids tendered were from the 91-day T-bills as demand surged. Government accepted all the bids of about ¢1.47 billion.

Again, the government accepted all the bids of ¢198.49 million tendered by the investors, largely banks.

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Analysts expect T-bill yields to decline as an expected International Monetary Fund support-programme in the first quarter of 2023 coupled with a stable outlook of the cedi may limit currency pass-through to inflation.

However, it will depend on a successful Domestic Debt Exchange programme.

According to the latest auction of treasury bills, the yield on all three short-term instruments took a nose dive.

The 91-day T-Bill recorded the biggest drop of 0.64% to 34.93%, followed by the 182-day bill with a decline of 0.50% to 36.03%.

The yield on the one-year bill also fell by 0.09% to 36.10%.

These declines in the yields of the short-term instruments though marginal will save the government some cost of repaying the principal and interest at maturity.

The declining interest rates are also boosted by improved liquidity as the government continues to secure more than its target for the T-bills auction.

However, this is partly due to the debt exchange programme where the Government of Ghana bonds have been affected by haircuts, unlike T-Bills.

According to the Bank of Ghana, developments in interest rates broadly the first 11 months of this year have showed upward trends across the spectrum of the yield curve, reinforced by the tight monetary policy stance and the relatively tight liquidity conditions in the money market.

However, the latest downward trend of interest rates will come as a good omen for the economy.

According to the latest auction by the Bank of Ghana, government secured ¢1.083 billion.

The high interest rates in the country have triggered investor interest in the short-term securities as liquidity continues to improve.

However, the yields are still below the inflation rate of 29.8%.

According to the auction, government accepted all the funds of ¢1.08 billion tendered by the investors.

This was after it fell short of achieving the target for the 3-year bond issued recently. 

The target for the sale of the short-term securities was ¢564 million.

Chunk of the funds, however, came from the 91-day T-bills, where ¢824.1 million was mobilized.

¢259.3 million was however obtained from the 6-months bill.

Interest rate again remained relatively stable.

For the 91-day T-bill, interest rate is going for 26.7%, compared with 26.3% the previous week.

That of the 6 months bill is still hovering around 28%.