T-bills: Government records 55% oversubscription; interest rates skyrocket

Demand for treasury bills soared on the money market as T-bills were oversubscribed by more than 55%.

However, interest rates continued to surged, increasing the government’s cost of repaying the short-term instruments.

According to action results by the Bank of Ghana, the government got a remarkable GH¢8.075 billion from the sale of the short-term instruments though it was looking for GH¢5.198 billion to refinance the maturing bills.

The government accepted all the bills tendered.

A whopping GH¢5.513 billion came from the 91-day bills, representing 68.27% of the total bids.

About GH¢1.416 billion cedis were also tendered for the 182-day bill.

On the other hand, GH¢1.145 billion were tendered for the 364-day bill.

Meanwhile, interest rates edge further on the yield curve, raising questions about the increasing cost of domestic debt.

The yield on the 91-day bill rose by 14 basis points to 28.33%.

That of the 182-day bill also reached 28.96% from 28.91% the prior week.

Similarly, the interest on the 364-day bill went up by 2 basis points to 30.17%.