Treasury Bills Auction: Government Oversubscribes by 7.4%, 91-Day Yield Drops to 4.71%

The Government of Ghana successfully conducted its latest treasury bills auction, exceeding its target by 7.4% with total bids amounting to GH¢8.7 billion. However, the government accepted only GH¢7.9 billion of the bids, reflecting a slight cooling in investor appetite compared to recent weeks. According to data released by the Bank of Ghana, the reduced demand was attributed to lower yields offered on the short-term instruments.

The 91-day bill remained the most sought-after instrument, with approximately 70% of total bids directed toward it. Bids for the 91-day bill totaled GH¢6.15 billion, but the government accepted GH¢5.8 billion. In contrast, the 182-day bill attracted GH¢2.05 billion in bids, with GH¢946 million accepted. The 364-day bill saw bids of GH¢529.46 million, of which GH¢480.46 million were accepted.

Despite the oversubscription, investor interest appeared more cautious, as the yields across the tenor spectrum showed mixed trends. The yield on the 91-day bill dropped by 11 basis points to 4.71%, marking a decline from the previous week’s 4.82%. The 182-day bill also saw a reduction in yield, falling from 6.30% to 6.28%. However, the long-term 364-day bill experienced a slight increase of 6 basis points, rising to 9.40% from 9.34%.

Analysts suggest that the downward trend in short-term yields reflects a combination of improved market liquidity and reduced inflationary pressures. The decline in yields on the shorter end of the yield curve may also signal growing confidence among domestic investors, who have increasingly turned to government securities amid a stabilizing macroeconomic environment.

The government’s ability to raise funds above its target indicates continued trust in its debt management strategy. However, the marginally lower demand compared to earlier auctions suggests that investors are becoming more selective, especially when yields do not offer a compelling return.

With inflation moderating and the Bank of Ghana maintaining a cautious monetary policy, future treasury bill auctions may see similar trends. Market participants will be watching closely for any shifts in investor sentiment, particularly as the government prepares for its full-year fiscal targets. The performance of the upcoming bond and bill offerings will be key indicators of investor confidence in Ghana’s economic trajectory.