After failing to meet its ambitious target of ¢3.33 billion, the government is expected to borrow ¢2.73 billion on the treasury market this week.
This will be used to refinance upcoming maturities worth ¢2.60 billion.
The government is expected to raise the money via the issuance of the 91-day, 182-day and 364-day Treasury bills.
Government has been lately borrowing very high on the money market as a result of lack of access to other sources of funding. Due to the debt default, it has not been able to access the international capital market as well as other concessional funding.
Analysts, however, expect the decline in inflation coupled with the expected International Monetary Fund (IMF) loan to slow the rise in money market yields in the near term.
Many market watchers also expect a board-level approval to have a significant positive impact on investor sentiments and augur well for the stability of the cedi.
Furthermore, access to funding is expected to support budget execution and reduce the reliance on short-term funding, leading to yield compression on the money market in the medium term.
Government missed T-bills target by 15.9%
Last week, the government missed its Treasury bills target by about 15.9%, following an ambitious target of ¢3.33 billion for the auction.
According to auction results, the uptake covered only 83.45% of the auction target, but exceeded the refinancing obligation by 20.62%.
Despite the four-straight months cool-off in inflation, the yield on 91-day and 182-day bills gained 17 basis points and 13 basis points respectively, to settle at 20.43% and 22.96%.
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