In an effort to finance its expenditure, the government plans to raise ¢94.4 billion through treasury bills in 2024, with an allocation of ¢31.8 billion set aside as a buffer for auction shortfalls. Analysts anticipate that the government will continue to secure excess uptakes to fortify the targeted buffer.
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Impact of Lower Inflation and Interest Rates Outlook
Amid a projected lower inflation and interest rates outlook, experts suggest that locking in the 364-day yield presents a more attractive inflation-adjusted return over the holding period. This strategic move aligns with the government's efforts to optimize returns while navigating the current economic landscape.
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November 2023 Auction Performance
In November 2023, the government successfully secured ¢15.3 billion, surpassing the rollover obligation by 45.4% and exceeding the offer target by 26.5%. Notably, investors submitted total bids worth ¢15.6 billion, representing a 14.9% month-on-month increase. This outcome exceeded the T-bill offer target by 29.0%, underscoring continued robust demand and confidence in government securities.
Strengthening Money Market Liquidity
November 2023 witnessed strengthened liquidity in the money market, driving heightened demand for weekly Bank of Ghana bills and T-bills among investors and banks. This surge in demand occurred against the backdrop of emerging downward pressure on yields within the market, reflecting evolving investor sentiment and perception on market conditions.
Upcoming Refinancing Obligation
Looking ahead to December 2023, the government faces an imminent refinancing obligation of ¢12.8 billion, marking a notable 21.7% month-on-month increase. This impending obligation highlights the government's ongoing financial responsibility and management of its funding requirements within the designated timeframe.
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