Despite a recent turnaround in the auctioning of short-term securities last week, the government missed its Treasury bills sale target this week by GH¢1million.
A total of GH¢1.145 billion were tendered by the Government through the Bank of Ghana for the risk-free bills this week. All of the bills were accepted, though it was insufficient to quench its financial hunger, as it marginally missed its target of GH¢ 1.146 billion.
With only a few weeks left in the year, the government is doing everything it can to raise enough monies to cover its short-term financing needs. As a result, it has little choice to raise the interest yield on the risk-free bills to pique investors’ interest.
According to the statistics from the Bank of Ghana, the Government of Ghana accepted GH¢ 870.24 million from 91-day T-Bill, GH¢ 185.80 million from 182-day T-Bills and GH¢ 89.70 million from 364-day T-Bill.
Specifically, investors shifted their attention to the 91-day bill as it was the most subscribed among the T-bills auctioned. GH¢ 870.24 million were tendered for the three-month bill and all that amount was accepted by the government. This bill is recommended for individuals who need cash frequently because it matures quickly compared to other bills. The three-month bill was auctioned at 12.51%, denoting a slight increase in the interest rate for the previous auction rate of 12.47%. This was refreshing news for short-term investors of the bill, as their gains increased by 0.04 percentage points, compared to those who invested in the same bill last week. The lowest rate for which investors were willing to trade for the bill was 12.37% and the highest those investors were willing to trade was 12.56%.
The Six-Month T-Bill Rate Improves
For the half-year bill, GH¢ 185.80 million were tendered for the bill and all those amounts were accepted. The six-month bill was auctioned for 13.20 percent of its face value which slightly arouse investors as it bettered its previous rate of 13.19 per cent. The least 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 13.25 percent.
The 364-day T-Bill on the other hand, has the lowest subscription rate. This is probably because of the length of time it takes to mature. In all, GH¢ 89.70 million were tendered for the 364-day bill and all of them were accepted. Expectedly, it is the most profitable risk-free bill among the short-term bills as it had the highest interest rate. This is best suited for those who do not want immediate liquidity. The 1-year bill was auctioned for 16.57 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. 86 percent.
The 5-year Foreign Exchange rate (FXR) was tendered for GH¢923.8 million with all bids accepted by the Central Bank. The bill was auctioned at 21 %. Per BOG’s data, the lowest rate at which investors were willing to trade for the bill was 20.5 percent, whiles the highest rate at which they were willing to trade was 21 percent.
However, the 2-year Foreign Exchange rate (FXR) had an uneventful week, as no bills were tendered for it, and 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, was 12.13 per cent for the 91-day bill as against 12.09 per cent previously in the December 13th auction. The lowest discounted rate for the 91-day bill was 12 per cent and the highest for the bill was 12.18 per cent.
The 182-day bill was auctioned at a discounted rate of 12.39 per cent. The lowest discounted rate for the 182-day bill was 12.2 per cent and the highest for the bill was 12.43 per cent.
For the 1-year investment bill, it was auctioned at a discounted rate of 14.21 per cent. The lowest discounted rate for the 364-day bill was 13.79 per cent and the highest for the bill was 14.43 per cent.
The Bank of Ghana announced that the Government of Ghana’s total target for the 91-day bill, 182-day bill and the 364-day bill is GH¢830 million for next week’s auction.
