The government exceeded its net borrowing target for treasury bills in the first quarter of 2024 by 24.8% to raise GH¢24.6 billion.
The treasury enjoyed an average weekly bid of GH¢5.1 billion in quarter one of 2024 compared with GH¢3.5 billion in the 4th quarter of 2023.
The favourable demand condition culminated in an average of 340 basis points declines in yields across the T-bills despite the less inspiring inflation outturn in the first quarter of 2024.
Analysts, however, expect the potentially tighter liquidity from the Cash Reserves Requirement (CRR) calibration to soften the average weekly bid sizes towards the low-GH¢4.0 billion region with a likely slowdown in the pace of yield decline
Since the beginning of the year, interest rates have tumbled by about 3.6%.
Importantly, the 91-day treasury bill has gone down by about 3.71%, whilst the 182-day bill has eased by 3.72%.
The 364-day bill has also dropped by nearly 4.0% since January 1, 2024.
Nonetheless, Ghana’s yields still ranked as the highest among the 11 most important African markets. Egypt, Kenya, and Malawi had rates of 24.98%, 16.73% and 16.00% respectively.
For the last two weeks, investors’ demand for treasury bills fell below the treasury’s target in money market auctions, as banks with loan-to-deposit ratios below 55% increased the cash reserves to the respective required levels.
“We foresee a likely softening in demand for T-bills and a potential slowdown in yield decline”, IC Research said.
