Investors shift attention to 182-day Treasury Bills, medium term instruments

Investors have shifted their attention to the 182-day Treasury bills as well as medium term financial instruments, as the weekly Treasury bills sale fell short of target marginally once again.

This is because of an increase in the interest yield of these instruments.

With barely three months to end the year, government is doing everything possible to raise enough funds to finance the budget.

Due to this, it has no option than to increase the interest yield of the financial instruments to boost investor interest.

Both the interest rates of the 6-months bill and the 2-year Treasury Note went up, therefore attracting interest in the financial instruments. The yield of the 182-day T-Bills was up by 400 basis points to 13.21%.

According to the figures of the Bank of Ghana, government mobilized 1.15 billion from the sale of the 91-day and 182-day T-Bills though the target was 1.23 billion.

The investors largely banks bought about ¢696.38 million of the 6-months bill, whilst they purchased ¢454.83 of 91-day T-Bills.

In recent times, liquidity has been tightening on the interbank market.

Some analysts had claimed that banks which are the biggest investors of Treasury bills had opted to liquidate some of their maturing bills in order to augment their cash balance as liquidity tightens.

Others also raised concerns that government’s surge in domestic borrowing could crowd out the private sector from accessing funds.

SECURITIES	BIDS TENDERED (GH¢)	BIDS ACCEPTED (GH¢)	INTEREST RATE
91-day	¢454.83 million	¢454.83 million	12.49%
182-day	¢696.38 million	¢696.38 million	13.17%
2-year Treasury Note	¢926.78 million	¢916.78 million	17.50%
TOTAL (91-day & 182-day)	¢1.151 billion
TARGET	¢1.290 billion