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Fixed Income Market: Gov’t falls short of auction target by GHS 139m

 


Government, fell short of achieving the set GHS 1.33bn target in the issuance of the 91 and 182 days treasury bills on the fixed income market.

Government, in auctioning the short term debt instruments managed to secure GHS 1.19bn out of the targeted GHS 1.33bn.

At the auction, offers tendered were below Government’s target as GHS 948 million was raised in 91-Day Bills and GHS 244 million in the 182-Day Bills.

BREAKDOWN OF TOTAL AMOUNT RAISED THIS WEEK
Treasuries Bids Tendered  (GH¢ MN)Bids Accepted  (GH¢ MN)
91-Day T-Bill 948.14 948.02
182-Day T-Bill 244.28 244.28
TOTAL 1,192.42 1,192.30

The 91 day and 182 day bills were auctioned at interest rates of 30.5% and 31.6% respectively.

RESULTS OF LAST WEEK’S TREASURY BILL AUCTION
GOG Treasuries Current Previous Change 
91-Day T-Bills 30.18% 29.91% 0.27%
182-Day T-Bills 31.34% 31.14% 0.20%

Recent talks about a domestic debt restructuring by government, has raised concerns among investors, particularly local investors – banks, pension funds, insurance companies – hence the government’s inability to meet its auction target for the first time in 15 weeks.

The domestic debt restructuring by government will involve either a cut in principal loans owed investors or a reduction in interest on loans. 

 

Banks, per reports, are likely to be the most affected by the domestic debt restructuring given their high exposure to government debts.

The target for the next auction (Tender #1818) is GH¢ 905 million in 91-day, 182-day and 364-day.

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