The Bank of Ghana’s Treasury bills auction exceeded expectations, with bids totaling GHS 3,861 million, surpassing the target of GHS 2,632 million by a substantial GHS 1,229 million.
This remarkable outcome signals strong investor interest in the government’s debt securities. The auction, featuring various tenors, witnessed the 91-day Bill attracting the highest number of subscriptions, followed by the 182-Day Bill and the 364-Day Bill.
The successful bids after the auction amounted to GHS 2,837 million, GHS 839 million, and GHS 185 million for the 91-Day, 182-Day, and 364-Day tenors, respectively.
Notably, the auction yields settled at averages of 29.03% for the 91-Day Bill and 31.51% for the 182-Day Bill, reflecting declines of 16 basis points (bps) and 23 bps, respectively, compared to the average rates from the previous auction. The 364-Day bill also saw a yield decline of 26 bps, settling at 32.08%.
Looking ahead, the Treasury aims to maintain its momentum, planning to raise approximately GHS 3,058 million in the upcoming auction. This capital infusion will primarily be facilitated through the issuance of the 91, 182, and 364-Day bills, strategically addressing impending maturities.
Meanwhile, the Treasury is seeking to borrow some GHS 12.7 billion in treasury bills for January 2024 to finance maturing bills. The expected GHS 12.7bn to be borrowed for this month is 1.2% lower than the GHS 12.8bn borrowed in December 2023.
Investors submitted total bids of GHS16.3 billion across the T-bills, representing an average weekly bid size of GHS 4 billion and exceeding the total maturities of GHS 12.8 billion.
Already, the government has raised GHS 3.2 billion in the first auction of 2024 which is 15.24% more than the targeted amount of GHS 2.7bn.
13 BDCs purchase $20m from BoG in first forex forward auction for 2024
Bulk Oil Distribution Companies (BDCs) undertook a substantive transaction with the Bank of Ghana (BoG).
Seizing the opportunity presented by the central bank’s forex forward auction, these entities collectively acquired $20 million at a rate of GHS 12.1369 per US dollar.
This is the first of such many forex forward auctions scheduled to take place in the first quarter of 2024. Participation in the auction saw thirteen BDCs submitting bids within a spectrum of GHS 11.8500 to GHS 12.1512.
The strategic alignment of these bids with the BoG’s established forex forward rate of GHS 12.1369 underscores the central bank’s concerted efforts to assuage uncertainties surrounding foreign exchange availability, particularly within the critical downstream sector responsible for pricing imported fuel.
This successful auction is poised to play a pivotal role in anchoring stability in fuel prices at retail pumps, a development that holds significance in allaying consumer concerns amid the backdrop of a fluctuating economic landscape.
Noteworthy is the Bank of Ghana’s earmarking of $120 million for forex auctions for the first quarter of 2024, a testament to its unwavering dedication to buttress BDCs engaged in fuel imports and, by extension, sustain stability in fuel prices amid prevailing economic exigencies.
This proactive stance by the Bank of Ghana is integral to a comprehensive strategy aimed at nurturing a stable forex market and safeguarding overarching price stability.
By undertaking these auctions, the central bank not only manifests a commitment to economic resilience but also plays a pivotal role in fostering an enabling business environment.
All in all, the success of the recent T-Bill auction underscores investor confidence in the country’s economic stability and the appeal of government-backed securities. As the Treasury continues to navigate fiscal challenges, monitoring future auctions will provide insights into the evolving dynamics of Ghana’s financial architecture.
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