Rates for the 91-day offer rose by 27.8 basis points to 5.605 percent from 5.327 percent in the secondary market and also up from last week’s 5.586 percent. Explore the most complete set of 6.6 million time series covering more than 200 economies, 20 industries and 18 macroeconomic sectors. Additionally, there is the broad expectation that yields would slowly rise, as the government is currently constrained to rely primarily on T-bills.
Cocoa prices, on the other hand, extended its gains with an annual growth of 66.8 percent to close at an average of US$4,235.60 per tonne, on the back of reduced supplies. The interbank weighted average rate remained well-aligned within the policy corridor by the end of 2023. The weighted average rate increased to 30.19 percent in December 2023 from 25.51 percent in December 2022, in line with the monetary policy rate and supported by adjustments made in the cash reserve ratio. The average lending rates of banks eased marginally to 33.75 percent in December 2023 from 35.58 percent a year earlier.
Gross International Reserves, excluding pledged assets and petroleum funds, reflected a significant build-up of US$2.2 billion at the end of December 2023 to stand at US$3.7 billion. The build-up was driven mainly by the gold for reserves programme and unwinding of short-term liabilities. However, the stock of Gross International Reserves ended the year at US$5.9 billion, enough to cover 2.7 months of imports of goods and services, from the stock position of US$6.3 billion (2.7 months of import cover) at the end of December 2022.
The sharp decline in yields has sparked concerns among investors, who fear that returns on T-bills may not keep pace with inflation, eroding the real value of their funds. Market analysts, however, argue that the government has factored inflation expectations into its fiscal strategy. The weighted average rate, he added, “increased to 30.19 per cent in December 2023 from 25.51 per cent in December 2022, in line with the monetary policy rate and supported by adjustments made in the cash reserve ratio”. Developments in the prices of the major export commodities, together with lower production levels in cocoa and crude oil, led to a marginal decline in the trade balance. The trade account recorded a surplus of US$2.63 billion for 2023, lower than a surplus of US$2.87 billion recorded in 2022. This decline in the trade surplus was attributed to a greater decline in export earnings relative to imports.
T-bill investors urged to stay calm
- Fiscal policy implementation was broadly aligned with requirements under the IMF ECF-supported programme.
- Yields on money markets and certificates of deposit are often priced relative to yields on Treasuries of a similar length.
- The Bureau of the Treasury yesterday fully awarded the entire P20 billion of T-bills offered at the first T-bill auction for November.
- The “sharp slowdown was driven in large part, by strong sterilisation efforts and effective liquidity management operations”, he noted.
Crude oil exports decreased significantly by 29.3 percent to US$3.8 billion driven by reduced volumes and lower prices. Other exports, including non-traditional exports, also decreased slightly by 1.9 percent to an estimated value of US$3.1 billion. On the imports side, payments were lower by 4.2 percent to US$14.0 billion, driven by both non-oil imports and oil and gas imports. Non-oil imports were estimated at US$9.5 billion, down by 4.6 percent.
“Since 2023, the government has financed its deficit 100 percent using treasury bills, and this will continue in 2025,” he noted. Meanwhile, base money growth “slowed down significantly through 2023 and was supportive of the disinflation process”, the Governor said. Rizal Commercial Banking Corp. chief economist Michael Ricafort said yields corrected higher this week in anticipation of a faster October headline inflation. Mr. Martey also believes that the 2025 budget is designed to restore price stability, which, in turn, will lead to lower interest rates. In short, treasury bill are the best investment in Ghana right now as it will not be affected by the 30% investment ‘haircut’ due to Ghana’s debt restructuring.
How does Treasury bill work at GCB?
Dr Addison added that in December 2023, “the pace of growth in private sector credit slowed to 10.7 per cent, compared with 31.8 per cent annual growth in December 2022”. Understanding how Treasury Bill interest rates are calculated empowers you to make informed investment decisions. By using the formulas and examples provided in this guide, you can easily determine your potential returns and decide whether T-bills align with your financial goals.
- The Bank is closely monitoring the capital restoration efforts of the banks in line with approved plans, including through support from the Ghana Financial Stability Fund.
- The trade account recorded a surplus of US$2.63 billion for 2023, lower than a surplus of US$2.87 billion recorded in 2022.
- Similarly, Dr Addison said the rate on the 364-day instrument decreased to 32.97 per cent in December 2023 from 36.06 per cent in December 2022.
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By increasing the supply of key food items such as grains, 91-day t-bill rate vegetables, and poultry, authorities aim to balance demand and stabilize prices. Treasury Bills are short-term debt instruments issued by governments to raise funds. In Ghana, T-bills are issued by the Government of Ghana through the Bank of Ghana, with tenors of 91 days, 182 days, and 364 days.
Treasury Bills Average Rates
We are compensated in exchange for placement of sponsored products and services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range, can also impact how and where products appear on this site. While we strive to provide a wide range of offers, Bankrate does not include information about every financial or credit product or service. He explained that stable prices extend beyond goods and services to exchange rates, ensuring that inflation. “Investors should view the current rate adjustments in the context of broader economic stability.
If inflation follows the government’s projections, real returns on T-bills will gradually improve,” he said said during IC Securities’ 2025 Investment Webinar. In real terms, he said credit to the private sector contracted by 10.2 per cent relative to a 14.5 per cent contraction, recorded over the same comparative period. Interest rates on the money market, “broadly trended downward at the short end of the yield curve” in 2023, Bank of Ghana Governor Ernest Addison has said. MANILA, Philippines — The government managed to borrow P20 billion in short-term securities even after rates moved upward for the fifth straight week amid expectations of a faster October inflation print. Mr. Martey likened this to a market scenario where high demand drives prices up.
In broad terms, the banking sector remains stable, despite the elevated credit risks. Bank’s liquidity and profitability positions have improved in the aftermath of the domestic debt restructuring. The Bank is closely monitoring the capital restoration efforts of the banks in line with approved plans, including through support from the Ghana Financial Stability Fund. It is expected that early recapitalization and effective risk management by banks will help promote overall banking sector stability and resilience and ensure effective financial intermediation to strengthen the economic recovery efforts. On the international markets, prices for the key export commodities traded mixed in 2023.
Mr. Martey pointed out that curbing the fiscal deficit remains a key priority. The government intends to finance the deficit exclusively through treasury bills, given the bond market’s continued closure following debt restructuring. Investors in Treasury Bills (T-Bill s) are facing negative real returns as short-term government securities yield significantly lower rates than the prevailing inflation. The Bank’s latest surveys conducted in December 2023 showed a strong rebound in both consumer and business sentiments, reflective of the signs of recovery. Consumer confidence improved on account of easing inflationary pressures which led to optimism about future economic conditions.
This also came a day before the much-anticipated US presidential elections as the markets priced in a possible Trump victory that could lead to higher inflation and Treasury yields. The 364-day short-dated debt papers saw rates at 5.786 percent, slightly down by 1.5 basis points from the reference rate of 5.801 percent but higher than last week’s level of 5.751 percent. The Finance Minister, Dr. Casiel Ato Forson, in the 2025 budget, projected inflation to decline to 11.9 percent by year-end, suggesting that the current dip in yields aligns with anticipated macroeconomic improvements. At different treasury bill rates in Ghana, it has a term of 91 days, 182 days, and 365 days.
Editorial 2 : ICT driving economic growth amid COVID-19
Base money growth slowed down significantly in the course of 2023 and was supportive of the disinflation process. Growth in reserve money defined to include currency outside banks and commercial banks reserves, slowed down significantly to 29.2 percent by end December 2023 relative to a growth rate of 57.5 percent observed in December 2022. The sharp slowdown was driven in large parts by strong sterilization efforts and effective liquidity management operations.
