Liquidity, confidence drive t-bill oversubscription — Analyst
Economic Analyst Emmanuel Boateng has attributed the government’s oversubscription of GHS6.33 billion in its latest Treasury bill sale to effective liquidity flow management and growing investor confidence in the Ghanaian economy, following a successful International Monetary Fund (IMF) review.
Speaking on Business Breakfast on Zed FM, Mr Boateng explained that the timing of liquidity and cash flow cycles plays a crucial role in driving demand for government securities.
He noted that institutional investors likely managed their liquidity positions strategically before the auctions, boosting subscription levels for Ghanaian Certificates of Deposit (CDs) and Treasury bills during October.
“By 10 October, new cash flows such as deposits, pension contributions, and matured bonds paying out would have arrived. This would have provided these institutions with over GHS6 billion in Certificates of Deposit to invest, making Treasury bills the most attractive option given interest rates between 10 and 12 per cent,” he indicated.
According to the analyst, investor behaviour around bond maturity and debt rollovers also influenced market dynamics, and confidence is shaped by the maturity profiles of bonds and the government’s ability to smoothly roll over maturing debt.
“Moreover, behind-the-scenes developments, such as a successful IMF programme review, may have bolstered confidence. The Finance Minister’s Twitter announcements about progress with the IMF and funding disbursements support this notion, suggesting growing investor belief in Ghana’s economic trajectory,” he stressed.
Mr Boateng further highlighted that Ghana’s ongoing economic growth and government efforts to transform the economy have contributed to the positive market sentiment.
However, he cautioned that unofficial pressures from state entities encouraging participation in certain financial projects, such as blockchain initiatives, could raise sustainability concerns if not driven by genuine market interest.
Official auction results from the Bank of Ghana revealed total bids worth GHS6.50 billion, signalling a return to oversubscription after weeks of undersubscription.
The government accepted GHS6.33 billion, surpassing the initial target of GHS5.26 billion by GHS1.06 billion, reflecting strong investor appetite for short-term government securities.
The 91-day Treasury bill cleared at 10.53 per cent, slightly up from 10.47 per cent at the previous auction. The 182-day and 364-day tenors were auctioned at 12.30 per cent and 12.86 per cent, respectively.
The government is set to return to the market on 17 October 2025, aiming to raise GHS6.57 billion.
