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Uncertainty within the general political and business environment, among others, are the main reasons behind the government’s inability to achieve its target of selling Treasury bills for a few weeks, said financial analyst and economist Dr. Lord Mensah.
The government for the third consecutive week did not meet its goal, falling below GH ¢ 112 million.
Dr. Mensah tells Joy Business that election uncertainties and timing of issuance are also negatively impacting the sale of T-Bills.
“It is clear on the basis that things were a bit uncertain when it comes to the environment, considering the preparation for the elections and also after the elections; it will obviously have an impact on investors. And as a result of that, any investor that the government issues Treasury bills or bonds, I don’t think they have the confidence to buy such issues, “he said.
In addition, Dr. Mensah pointed out: “Let’s also look at the main purchases of these Treasury bills that are being issued by the government, there are mainly banks and other financial institutions, and these are institutions that see risk very well. Once the exposure gives a bad signal, obviously [investors] They won’t believe it. “
The sale of T-Bills did not reach the goal in GH ¢ 112
For the third consecutive week, the government failed to meet its target for the sale of Treasury bills, reaching GH ¢ 739.1 million compared to the target of GH ¢ 852 million at the end of the last auction on December 31 of last year. The interest rate on the instrument also rose 100 basis points.
The government did not reach its goal of GH ¢ 112 million.
This compared to the GH ¢ 109 million achieved the previous week.
The continued underwriting that started before Christmas has been a major concern to analysts and market watchers.
However, it is unclear whether the continued holding of cash by banks that are major players in the T-bill market during the holiday period contributed to the government’s inability to meet its T-Bills target.
This is because financial intermediaries expected to close the year well and therefore may have limited themselves to overnight transactions, such as interbank or foreign exchange transactions, which will bring them immediate income.
For the 3-month T-Bill, the government accepted all offers that were slightly above GH ¢ 510 million, while it accepted GH ¢ 112 million for the six-month ones. For the one-year note, it raised GH ¢ 116 million at an interest of 16.9%.
However, the price of the 3- and 6-month T-bills rose 1.0% as investors demanded more for their investments.
