T-bill auction: Interest rates shoot up again; government secures ¢1.79bn

Interest rates shot up marginally again for the third week running, as the market corrects itself to reflect the prevailing economic condition.

According to the auction results, the yield on the 91-day and 182-day T-bills inched up slightly.

Whilst the 91-day T-bill went up by 0.05% to 19.79%, that of the 182-day bill increased to 22.47%, from 22.24% the previous week.

But the one-year (364-day) bill went down by 0.05% to 26.90%.

Government is hoping to reduce its interest costs substantially this year and the next couple of years, and therefore the high interest rate is a concern.

Meanwhile, the government secured ¢1.79 billion from the sale of the short term instruments, about 7.5% oversubscription of the targeted amount of ¢1.666 billion.

Chunk of the bids came from the 91-day T-bill, whereby ¢1.47 billion were tendered. All the bids were accepted.

About ¢227 million were also received for the 182-day T-bill. Again, all the bids were accepted.

All of the ¢87.81 million bids for the 364-day bill was also accepted.