The Bank of Ghana’s latest auction results revealed that the government missed its T-bill target by GHS169 million. The government had set out to raise GHS5.38 billion in this round of issuance but only managed to collect GHS5.21 billion in bids. Despite the shortfall, all submitted bids were accepted across all maturities, indicating continued investor interest in government debt instruments.
Breaking down the figures, the 91-day bill attracted the largest interest, with GHS3.85 billion fully allocated. The 182-day and 364-day tenors followed with GHS747 million and GHS611 million accepted respectively. The full acceptance of bids suggests that the government is keen on securing liquidity, even if it means accepting the entire amount tendered despite falling short of its target.
This auction reflects a broader monetary policy environment in which interest rates are on a steady decline. Average yields on T-bills now hover between 15% and 16%, a result of the Central Bank’s efforts to control inflation and reduce the cost of borrowing. This policy direction appears to be resonating through the fixed income market.
Specifically, the 91-day yield dropped by 7 basis points to 15.16%, while the 182-day and 364-day yields also saw reductions, falling to 15.70% and 16.80% respectively. These consistent drops suggest a continuing downward trend in yields as investor confidence and inflation management improve.
Looking ahead, the government is planning a more ambitious auction, targeting GHS6.68 billion in the upcoming round. Whether investor appetite will remain strong enough to meet this higher target will depend largely on evolving market conditions and ongoing fiscal strategies.
Source: Citi newroom