T-bills: Government records 3.60% oversubscription; but cost of borrowing surges

The government recorded another marginal oversubscription of treasury bills.

It however came at the expense of rising interest rates as the cost of borrowing surged.

According to the auction results by the Bank of Ghana, the government bagged GH¢5.825 billion from the sale of the short-term instruments.

This is against a target of GH¢5.623 billion.

All the bids were accepted.

A staggering GH¢ 5,107 billion, about 87.67% came from the 91-day bill.

For the 182-day bill, GH¢ 560.07 million cedis were tendered.

A little over GH¢ 157 million were however offered for the 364-day bill.

Meanwhile, interest rates increased on the yield curve.

Some analysts believe the government would have missed its target if interest rates had stayed the same or gone down.

The yield on the 91-day bill went up by 26 basis points to 26.82%.

The rate on the 182-day bill was however 27.67%, higher than the 27.58% recorded a week ago.

That of the 264-day bill also shot up to 29.12%, compared with 28.97 the preceding week.