On March 14, 2025, the Ghanaian government plans to borrow a significant GH¢8.26 billion via treasury bills. These funds will be raised through the issuance of 91-day, 182-day, and 364-day bills, with the primary goal of covering GH¢7.91 billion in maturing bills.
The positive development in this borrowing cycle is that the cost of borrowing has been on a downward trend, following a notable drop in yields to nearly 16% last week. However, the treasury market is experiencing a shift, as institutional investors are increasingly turning to the short-end of the yield curve in search of higher returns. This is evidenced by the Bank of Ghana's 56-day bill, which surged by 65.81% week-on-week to reach GH¢8.94 billion last week.
The shift in investor behavior signals analysts’ expectations of a yield floor in the near future. A slowdown in market participation could potentially moderate the compression of yields. According to Databank Research, while the inflation rate remains elevated, treasury yields could continue to decline. However, lingering uncertainty surrounding rate decisions and concerns over “bid rejection phobia” may delay stabilization, with the market outlook heavily dependent on the Monetary Policy Committee's (MPC) upcoming decision on the Monetary Policy Rate (MPR).
Last week, the treasury bill market saw one of the most significant declines in yields, marked by a sharp drop in investor bids, which fell by 43.5% week-on-week to GH¢10.31 billion. Despite this, total uptakes amounted to GH¢6.22 billion, surpassing both the target of GH¢5.74 billion and the upcoming maturities of GH¢5.45 billion.
Yields on the 91-day, 182-day, and 364-day bills decreased significantly, with the 91-day yield falling to 17.71%, the 182-day to 18.97%, and the 364-day to 19.98%. These drops represent week-on-week declines of 307 basis points, 402 basis points, and 272 basis points, respectively.
Source; theghanareport
.jpeg)
.jpeg)
.jpeg)
.jpeg)
.jpeg)
No comments:
Post a Comment