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T-bills auction: Government borrowed ¢9.14bn in July 2023

The government borrowed ¢9.14 billion via treasury bills in July 2023.

The government borrowed ¢9.14 billion via treasury bills in July 2023.

This is 29.11% lower compared to June 2023.

The overall auctions churned bid/cover, target coverage, and maturity coverage ratios of 1.01, 1.10, and 0.95 respectively.

On a monthly basis, the 91-day and 182-day yields surged to 25.24% (129 basis points) and 27.15% (135bps), respectively, while the 364-day closed at 30.31% (105bps).

Analysts believe yields will record further increases in August 2023 as investors price in near-term inflation risk, with government reliance on money market funds.

“Given that Treasury bills remain the only domestic borrowing instrument available to the authorities amidst conditional inflows from IMF-related sources, we expect yields to remain under upward pressure in the near term”, a Senior Economic Analyst stated.

In the first week of the month of August 2023, the government treasury bills auction fell short of target marginally.

According to the auction result published by the Bank of Ghana, the government secured ¢2.179 billion as against a target of ¢2.261 billion. The T-bills sale indeed fell short of the target by 3.6%.

The majority of the bids came from the 91-day bill as about ¢1.384 billion of the bids were tendered. All of the bids were accepted by the Treasury.                                                                                                                          Source: Joy Business

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