Gov’t raises GH¢4.41bn in T-bills, exceeds target by 53.5% as yields fall
The government has exceeded its target in the latest Treasury bill auction, raising approximately GH¢4.41 billion as demand for short-term government securities remained strong and yields declined across all three maturities.
The Treasury had set a target of GH¢2.87 billion but accepted about GH¢4.41 billion in bids for the 91-day, 182-day and 364-day bills, representing an oversubscription of approximately 53.5%.
The outcome reflects sustained investor interest in government securities despite declining returns on the instruments.
The 91-day Treasury bill attracted GH¢3.29 billion in bids, of which GH¢3.01 billion was accepted.
The 182-day bill received GH¢1.31 billion in tenders, with the government accepting GH¢1.26 billion.
Demand for the 364-day instrument was comparatively lower, attracting GH¢468 million in bids, of which only GH¢136 million was accepted.
The results indicate that the Treasury relied more heavily on shorter-term instruments to meet its financing needs, accepting less than a third of the bids submitted for the one-year bill.
Yields decline across all maturities
Interest rates on all three Treasury bills declined, extending the downward trend in government borrowing costs.
The yield on the 91-day bill fell to 4.60% from 4.64%, while the rate on the 182-day instrument dropped to 6.28% from 6.32%.
Similarly, the 364-day bill yield decreased to 9.75% from 9.80%.
Although the reductions were marginal, they suggest investors were willing to accept slightly lower returns on government securities across the different maturities.
However, the gap between short-term and longer-term yields remains significant. The 364-day bill offers a return of 9.75%, compared with 4.60% for the 91-day instrument, reflecting the higher yield available to investors who commit their funds for a longer period.
Implications for government borrowing and investors
The auction results could help the government manage its short-term borrowing costs if strong investor demand continues to support lower yields in subsequent auctions.
The figures also highlight the distinction between the total bids submitted by investors and the amount accepted by the Treasury.
Although demand enabled the government to raise more than its target, the relatively low acceptance rate for the 364-day bill suggests a more selective approach to longer-term borrowing.
Future auction results will be crucial in determining whether the decline in yields continues and whether the government can further reduce its short-term financing costs.
For now, the combination of above-target borrowing and falling yields points to favourable demand conditions for government securities, although the sustainability of the trend will depend on investor appetite, market liquidity and the government’s financing needs.
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