Interest rates remain unchanged as government T-bills oversubscribed by 52%

Interest rates remained stable despite the government achieving more than 52% oversubscription of Treasury bills sale.

According to the latest auction results, government obtained ¢1.72 billion from the short-term securities, but accepted ¢1.71 billion of the bids tendered.

The target for the auction was ¢1.125 billion.

More than 85% of the bids tendered were from the 91-day T-bills as demand surged. Government accepted all the bids of about ¢1.47 billion.

Again, the government accepted all the bids of ¢198.49 million tendered by the investors, largely banks.

The yield on the 91-day and the 182-day T-bills dipped slightly though relatively same from the previous week.  This is despite December 2022 inflation shooting up to 54.1%.

The yield on the 91-day T-bill was 35.46%, slightly lower than the 35.65% recorded the previous week. That of the 182-day bill was also virtually unchanged at 35.83%.

For the 364-day T-bill, the government secured ¢43.34 million but accepted ¢36.08 million of the bids tendered. The interest rate for the instrument was however 35.91%.

Analysts expect T-bill yields to decline as an expected International Monetary Fund support-programme in the first quarter of 2023 coupled with a stable outlook of the cedi may limit currency pass-through to inflation.