The government is set to borrow ¢4.08bn in the final auction of Treasury bills (T-bills) for 2023, the Bank of Ghana (BoG) has announced.
The auction, which will be held on December 30, 2023, is for the 91-day, 182-day, and 273-day T-bills.
According to the BoG, the government is seeking to raise ¢1.42bn in 91-day T-bills, ¢1.5bn in 182-day T-bills, and ¢1.16bn in 273-day T-bills.
The yield rate for the 91-day T-bills is expected to remain unchanged at 14.10%, while the yield rate for the 182-day T-bills is expected to decline to 14.20% from 14.30%. The yield rate for the 273-day T-bills is expected to remain unchanged at 14.40%.
The previous auction, held on December 22, 2023, saw the government raise ¢4.10bn in T-bills.
The government has been relying heavily on T-bills to finance its budget deficit in recent years. The deficit is projected to reach ¢12.4bn in 2023.
The high level of government borrowing has contributed to rising interest rates in Ghana. The average yield rate on T-bills has increased from 12.30% in January 2023 to 14.40% in December 2023.
The high interest rates are making it more expensive for businesses and consumers to borrow money, which is slowing economic growth.
The government has said that it is committed to reducing its reliance on T-bills and financing its budget deficit through other means, such as increasing tax revenue. However, it is unclear whether the government will be able to achieve this goal in the near term.