In an unprecedented streak, interest rates in the Treasury Bill auctions have plunged for ten consecutive weeks, showcasing an unyielding demand for treasury bills despite looming upside risks.
As anticipated by market analysts, interest rates nosedived, aligning with the downward trajectory of inflation.
According to Joy Business, the 91-day bill’s yield saw a substantial decline of 25 basis points, settling at 26.74%. Similarly, the 182-day bill experienced a drop to 29.24% from the previous week’s 29.49%. The 364-day bill also followed suit, dipping by 16 basis points to 29.84%.
Simultaneously, the government found itself flooded with bids, accepting a staggering GH¢4.83 billion, marking a notable oversubscription of about 12%.
In specific breakdowns, Joy Business reports that the 91-day bill saw bids totaling approximately GH¢2.72 billion, constituting 56.3% of the total bids, all of which were duly accepted. Similarly, the entire GH¢919.40 million in bids for the 182-day bill found acceptance. The 364-day bill witnessed a similar trend, with all GH¢1.18 billion worth of bids getting accepted.
The sharp decline in yields during February 2024 took many by surprise, attributed largely to the robust liquidity in the money market, which overshadowed any potential risks stemming from the unexpected rise in January 2024’s inflation.
Month-on-month, Joy Business further reports that the 91-day yield saw a significant reduction of 131 basis points, settling at 27.3%. Meanwhile, the 182-day and 364-day yields experienced decreases of 135 and 150 basis points, reaching 29.8% and 30.3%, respectively.
Source: Ghanaweb