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Monday, November 28, 2022

T-bills oversubscribed by 1.15% after undersubscription a week before

Government Treasury bills sale returned to a marginal oversubscription, following an undersubscription of the treasury securities auction the previous week, the first time in 15 weeks.

This comes as good news due to fears an expected debt restructuring exercise may cause an extension of the maturity periods of the treasury instruments.

However, the interest yields went up marginally again to compensate investors for the rising inflation. But there is still a negative variance between the T-bills rate and inflation.

According to the auction results by the Bank of Ghana, the government secured ¢999.86 million from the sale of Treasury bills, about 1.15% oversubscription. The target for the auctioning was ¢905 million.

The yield on the 91-day T-Bill finally inched up to 30.45%, from 29.90% the previous week.

As usual, chunk of the funds mobilised came from the 3-months bill.

¢717.22 million bids were tendered as the government accepted all the bids.

The 182-day bill which is already trading above 31% also increased marginally to 31.54%, from 31.34% the preceding week.

For the 364-day bill, the government accepted all the ¢137.04 million bids tendered. The interest rate was however 31.54%.

Last week, some analysts pointed out that the government may face complicated refinancing options in repaying Treasury bills that will mature in October 2022

According to the Weekly Fixed Income Update by Databank Research, a refinancing offer on October 3, 2022, may not get much traction due to the expected domestic debt restructuring.

It, therefore, pointed out that the government will likely supplement any refinancing offer with the Bank of Ghana support to get more favourable refinancing options.

However, this challenge should compel government to move fast over the negotiation with the International Monetary Fund for an economic programme to avert any liquidity constraint.  

Securities Bids Tendered (GH¢) Bids Accepted (GH¢)
 91 Day Bill  717.22 million  717.22 million
182 Day Bill  145.60 million  145.60 million
 364-Day Bill  137.04 million  137.04 million
     
     
     
Total 999.86 million 999.86 million
Target 905.00 million
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