Treasury bill auction oversubscribed by 53.5% as yields fall across maturities

Government has raised approximately GH¢4.41 billion in its latest Treasury bill auction, exceeding its GH¢2.87 billion target by about 53.5% as investor demand remained strong and yields declined across all three maturities.

The auction results show that investors tendered bids across the 91-day, 182-day and 364-day instruments, with the Treasury accepting more than its target despite offering lower returns than in the previous auction.

The 91-day bill attracted GH¢3.29 billion in bids, of which GH¢3.01 billion was accepted.

The 182-day instrument received GH¢1.31 billion in tenders, with GH¢1.26 billion accepted, while the 364-day bill attracted GH¢468 million in bids, of which GH¢136 million was taken up.

The acceptance pattern indicates that the Treasury relied mainly on the shorter-dated instruments to meet its financing needs, accepting less than a third of the bids submitted for the one-year bill.

Yields declined across all three maturities. The rate on the 91-day bill fell to 4.60% from 4.64%, while the 182-day yield eased to 6.28% from 6.32%. The 364-day rate also dropped to 9.75% from 9.80%.

Although the reductions were modest, the lower rates suggest investors were willing to accept slightly reduced returns on government securities.

The difference between the 91-day and 364-day yields remained significant, with the longer-dated instrument offering a higher return in exchange for a longer commitment of funds.

The strong uptake could support government’s efforts to manage short-term borrowing costs if demand persists in subsequent auctions.

However, future results will be important in determining whether yields continue to decline and how much flexibility the Treasury has to reduce its financing costs.

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