The government of Ghana has announced its plan to borrow a substantial GH¢12.7 billion through treasury bills in January 2024.

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This move, aimed at financing maturing bills, represents a 1.2% reduction compared to the borrowing figure for December 2023.

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Surprisingly, the government has already achieved an impressive feat in the new year by raising GH¢3.223 billion in the first auction of 2024.

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This amount surpasses the targeted figure by a significant margin, standing at 15.24% more than anticipated.

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Industry analysts, gauging the robust demand that averages GH¢4.0 billion per week, predict a smooth and successful refinancing of the upcoming maturities.

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Despite this optimistic outlook, expectations linger regarding heightened targets to address the 2024 budget deficit and create a buffer for the February 2024 coupon payments on the restructured bonds.

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The surge in demand for treasury bills observed in December 2023 underscored investors' unwavering interest. With total bids reaching a staggering GH¢16.3 billion across the T-bills, the average weekly bid size hit GH¢4.0 billion, surpassing the total maturities of GH¢12.8 billion.

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The government, facing a pressing need for maturity refinancing, accepted all tendered bids, amplifying the financial manoeuvre's impact.

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Examining the yield landscape in December 2023, a mixed outcome emerged. Downward pressure, stemming from sharp disinflation, contrasted with upward pressure induced by the increased Cash Reserve Ratio.

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Notably, the 91-day and 364-day yields experienced reductions of 14 and 74 basis points month-on-month, settling at 29.4% and 32.5%, respectively. In contrast, the 182-day yield gained 19 basis points, reaching 31.9%.

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These nuanced shifts in yields add further intrigue to the government's financial strategies as it navigates the intricate landscape of economic variables and investor sentiments.

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