The Government of Ghana last Friday at its weekly auction of treasury bills, missed its auction target of GH¢4.865 bn by some 15.4%, a continuation of the downward trend recorded in the last few weeks as government tries to reduce the cost of borrowing from the local market.

Despite accepting all bids tendered comprising, GH¢ 3.05 bn, GH¢ 795 m & GH¢ 269.15 m worth of 91, 182 AND 364-day treasury bills respectively at the end of tender 1904 held on May 24th, the GH¢ 4.115 bn raised, amounted to an underwhelming 84.59% of the target set a week prior.

Government in its treasury auction on 17th May, exceeded its target by only 0.7%, its worst performance in weeks after it on May 3rd & 10th, recorded oversubscription of 17.07% and 33.83%. But the latest result comes on the back of possible uncertainties in inflationary outlook as interest rates remain above the current inflation rate of 25%.

Generally, the rate of yields were relatively stable in the last auction after recording marginally slow downs since the start of year likely on the back of the rates converging with that of inflation.

Government for the next auction, tender 1905, slated for 30th May has significantly revised downward its target to GH¢ 2.718 bn, a move believed to ensure rates remain stable and create balanced market dynamics as demand for short-term liquidities keep falling.

Meanwhile, the Bank of Ghana later this morning following a completion of its MPC meeting will announce its decision and possibly a new policy rate.