T-bills auction: Government exceeds target by 40%; Borrowing costs surge

Government borrowing on the money market continued to shoot up significantly, as it accepted 99.9% of the bids tendered by the investors for the just-ended Treasury bills auction.

The sale of the short-term securities was also oversubscribed by about 40% of the targeted amount of ¢1.834 billion, but once again the cost of borrowing has become a concern to many analysts and market watchers.

According to the auction by the Bank of Ghana, the government accepted a significant ¢2.56 billion from the bids submitted by the investors, largely the banks.

Yet again, majority of the bids came from the 91-day T-bills as ¢1.62 billion were tendered. All the bids were consequently accepted.

Also, almost all the ¢380.75 million of bids submitted for the 182-days T-bills were accepted.

Again, the ¢380 million bids submitted for the 364-day bill were taken.

Presently, the treasury market is the only source of borrowing for the government, a situation which has compelled the treasury to increase the borrowed amount despite the high-interest rates.

Meanwhile, interest rates continued to surge on the money market.

Whilst, the yield on the 91-day T-bill went up to 20.25%, from 19.94% that of the 182-day bill also inched up by 0.11% to 22.82%.

The rate for the 364-day bill stood at 27.36%.

Securities	Bids Tendered (GH¢)	Bids Accepted (GH¢)
91 Day Bill	1.629 billion	1.629 billion
182 Day Bill	557.92 million	557.90 million
364 Day Bill	380.75 million	380.75 million
Total	2.567 billion	2.567 billion
Targeted	1.834 billion	1.834 billion

Source: Ghana News