Treasury Bill Auction Oversubscribed as Ghana’s Interest Rates Drop to 4.82%

Ghana’s recent Treasury bill auction has once again exceeded expectations, signaling strong investor confidence in government securities. The Bank of Ghana reported that the government raised GH¢458 million above its GH¢5.67 billion target, with total bids for the 91-day, 182-day, and 364-day bills reaching GH¢10.76 billion. Of this, GH¢6.14 billion was accepted, marking an oversubscription rate of 89.53 percent. This extends the streak of excess demand for Treasury bills to fifteen consecutive weeks.

Investors showed keen interest across all tenors, with the 91-day Treasury bill attracting the highest bids. Submissions for the short-term instrument totaled GH¢5.21 billion, of which GH¢3.47 billion was accepted. The 182-day bills received GH¢1.96 billion in bids, with GH¢946.44 million accepted, while the 364-day bills garnered GH¢3.60 billion in bids, with GH¢1.72 billion approved. The data reflects robust demand for government-backed short-term investment options.

The strong demand came amid declining yields, reflecting easing pricing conditions and abundant liquidity in Ghana’s financial markets. The 91-day Treasury bill rate dropped by 50 basis points to 4.82 percent, down from 5.32 percent in the previous auction. Similarly, the 182-day yield fell to 6.30 percent, while the 364-day rate declined to 9.34 percent, signaling more favorable borrowing conditions for the government.

Market analysts suggest that the persistent oversubscription, combined with declining yields, points to improving liquidity and sustained investor confidence in government securities. There is a noticeable shift in demand toward shorter-dated instruments, indicating that investors are increasingly seeking safer, short-term investment options amid market uncertainties.

Looking ahead, the Bank of Ghana has set a target of GH¢8.13 billion for the next Treasury bill auction, signaling continued efforts to fund government operations while maintaining attractive returns for investors. Analysts expect the upcoming auction to attract similar strong demand, particularly for short-term Treasury bills, as the trend of oversubscription appears set to continue.

source: citi newsroom