By zainab.joaqué@awokonewspaper.sl
Freetown, SIERRA LEONE – On October 3, 2024, the Central Bank of Sierra Leone conducted its first auction of the month, offering a total of SLe 70.126 million in Treasury Bills. This auction featured two types of securities: SLe 363,650 in 182-day Treasury Bills (TBills) and a more substantial SLe 69.762 million in 364-day TBills.
Investors were required to submit their bids by October 2, 2024, through any commercial bank or discount house. The minimum bid for participation was set at SLe 500.00, with bid increments of SLe 50.00. The auction committee maintained flexibility to adjust the auction size by up to 10%, depending on market demand, demonstrating a willingness to adapt to changing financial conditions.
As of now, the Central Bank has yet to release the results of this auction, leaving investors and market participants eager to see the final outcomes, including the interest rates that were established. The results will offer valuable insight into investor sentiment and overall demand for government securities, providing a clearer picture of Sierra Leone’s current financial climate.
In the previous auction held on September 26, 2024, the Bank of Sierra Leone offered a total of SLe 118,055.15 thousand in government securities. The auction comprised two categories of TBills: SLe 426.15 thousand in 182-day TBills and a larger SLe 117,629.00 thousand in 364-day TBills.
Results from this auction indicated strong demand for shorter-term securities, with bid prices for the 182-day TBills set at 88.00%, yielding an annual return of 29.22%. The longer-term 364-day TBills attracted even more interest, with bid prices ranging from 71.00% to 70.84%, resulting in an impressive annual yield of 41.28%.
In contrast, the auction held on September 19, 2024, offered a significantly larger total of SLe 310,333.80 thousand. This auction featured various securities, including SLe 1,000.00 thousand for 91-day TBills, SLe 1,181.80 thousand for 182-day TBills, SLe 282,152.00 thousand for 364-day TBills, and SLe 26,000.00 thousand for 3-year Treasury Bonds (TBonds). The sharp drop in the total amount offered in subsequent auctions may indicate a shift in government financing needs or a response to changing economic conditions.
The fluctuations in the amounts offered between these auction dates reflect evolving strategies in managing government debt and adapting to the country’s financial needs. Investors are closely watching these trends to assess future opportunities in Sierra Leone’s government securities market. ZIJ/7/10/2024
