It was a satisfying week for the government as its short-term securities were oversubscribed by 0.67 percent to GH¢ 780.23 billion in the latest auction by the Bank of Ghana, which was announced on Friday night, December 10th, 2021. The amount exceeded the Government’s target by GH¢ 5.23 million.
Following the previous auction’s high undersubscription of GH¢ 221.48 million, this is a tremendous relief for the government.
According to the statistics from the Bank of Ghana, the Government of Ghana accepted GH¢ 559.80 million from 91-day T-Bill, GH¢ 166.73 million from 182-day T-Bills and GH¢ 53.70 from 364-day T-Bill.
The government actually accepted all the investor bids even though it had more than it had targeted. The majority of the investors were financial institutions, particularly banks.
Specifically, GH¢ 559.80 million was tendered for the 91-day treasury bill and all that amount was accepted by the government. The three-month bill was auctioned at 12.47% denoting a marginal decrease in the interest rate for the previous December 6, 2021 auction of 12.48%. The lowest rate for which investors were willing to trade for the bill was 12.37% and the highest those subscribers were willing to trade for the bill was 12.58%.
For the six-month bill, GH¢166.73 million was tendered for the bill and all those amounts were accepted. The six-month bill was auctioned at 13.19 percent of its face value which is good news for investors as it bettered its previous rate of 13.17 per cent. The lowest rate at which investors were willing to trade for the bill was 12.99 percent, while the highest rate at which they were willing to trade was 13.28 percent.
The 364-day T-Bill had the lowest subscription and probably because of the length of time involved for investors to receive their money. GH¢ 53.70 million was tendered for the bill and all of them were accepted. The 1-year bill was auctioned for 16.36 percent of its face value. The lowest rate at which investors were willing to trade for the bill was 16 percent, while the highest rate at which they were willing to trade was 16. 96 percent.
However, it was a quiet week for the 2-year Foreign Exchange rate (FXR) as no bills were tendered for it, hence none were accepted.
Discounted rates for the investment bills
The discounted rate, the amount investors get when they buy an investment bill in excess over its face value, for the 91-day bill was 12.09 per cent as against 12. 1 per cent previously in December 6th auction. The lowest discounted rate for the 91-day bill was 12 per cent and the highest for the bill was 12.2 per cent.
Additionally, the 182-day bill was auctioned at a discounted rate of 12.38 per cent. The lowest discounted rate for the 182-day bill was 12 per cent and the highest for the bill was 12.45 per cent.
For the 1-year investment bill, it was auctioned at a discounted rate of 14.06 per cent. The lowest discounted rate for the 364-day bill was 13.79 per cent and the highest for the bill was 14.5 per cent.
The Central bank announced that in the next auction, the government of Ghana’s total target for the 91-day bill, 182-day bill and the 364-day bill will be GH¢ 1,146.00 million.
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