Ghana’s government exceeded its target by GHS 1.41 billion in the latest Treasury bill auction. Investors submitted GHS 7.37 billion in bids for government securities last week, according to the Bank of Ghana. The government accepted GHS 6.01 billion from these bids.
This strong investor interest signals a renewed appetite for Ghana’s short-term government debt. The oversubscription reached 31% above the government’s fundraising goal. This resurgence in demand follows a period of weaker investor participation in previous auctions.
The increased investor confidence comes as yields, which are the returns investors get, have been slowly rising. Higher yields make these investments more attractive. This fresh demand helps the government meet its ongoing financing needs.
The 364-day Treasury bill attracted the most interest from investors. These bids totaled GHS 5.43 billion. The government accepted GHS 4.29 billion for this longer-term bill. This amount represented the largest share of the funds raised.
Bids for the 91-day bill reached GHS 1.48 billion, with GHS 1.34 billion accepted. The 182-day bill received GHS 461.91 million in bids. The government accepted GHS 378.80 million for the medium-term bill.
Yields increased across all bill durations in the latest auction. The yield on the 91-day bill rose by 43 basis points, reaching 5.73% from 5.30%. One basis point is one-hundredth of a percent. The 182-day bill yield climbed 56 basis points to 7.69% from 7.13%. The 364-day bill saw the largest increase, surging 146 basis points to 12.82% from 11.36%.
This performance follows a challenging period for government securities earlier in the year. The government had previously faced undersubscription in its Treasury bill auctions for five consecutive weeks. Analysers anticipate continued strong demand in upcoming auctions. The expectation is that yields will continue to adjust upwards, maintaining investor interest.
The government plans to raise GHS 3.37 billion in its next Treasury bill auction. This continued oversubscription suggests market confidence in Ghana's short-term fiscal instruments. This trend is crucial for the government managing its public debt and financing essential services. Increased investor participation helps stabilise the cedi and supports broader economic recovery efforts. It also reflects ongoing efforts by the Bank of Ghana to manage inflation risks and realign monetary policy.