T-bills Auction Oversubscribed by 61%
By Praisebell Rosemond Larbi
Investor appetite for government securities remained strong as the latest Treasury bills auction significantly exceeded its target, although yields, particularly at the longer end of the curve continued to trend upward.
According to auction results released by the Bank of Ghana, the government accepted a total of GH¢12.8 billion in bids, representing a 61 per cent oversubscription against the initial target of GH¢9.8 billion. Total bids tendered at the auction amounted to GH¢15.9 billion, reflecting sustained demand from investors seeking relatively safe instruments amid prevailing market conditions.
The 364-day Treasury bill attracted the largest share of investor interest, accounting for nearly half of total bids. About GH¢7.4 billion was tendered for the one-year instrument, representing 46.8 per cent of all bids submitted at the auction. Out of this amount, the government accepted a little over GH¢5.0 billion, underscoring both strong demand and selective uptake at the longer end of the curve.
The 182-day bill also recorded robust participation, with bids tendered amounting to approximately GH¢4.29 billion. Of this figure, bids worth about GH¢4.28 billion were accepted, indicating a high acceptance rate and continued investor confidence in medium-term government paper.
Similarly, the 91-day bill attracted bids totalling around GH¢4.1 billion, with just over GH¢3.4 billion accepted. The strong demand across all tenors highlights ample liquidity in the market and investors’ preference for government securities as a low-risk investment option.
Despite the heavy oversubscription, yields continued to rise modestly, particularly on longer-dated instruments. The interest rate on the 91-day bill was maintained at 11.19 per cent, unchanged from the previous auction. However, the 182-day bill saw a slight uptick in yield, increasing to 12.66 per cent from 12.64 per cent the previous week.
The most notable movement was recorded on the 364-day bill, where the yield rose by 8 basis points to 13.06 per cent, reinforcing the upward pressure on rates at the long end of the money market yield curve.
Market analysts note that while the persistent oversubscription reflects strong investor confidence in government instruments and effective liquidity management, the gradual increase in yields suggests sustained borrowing needs and investors’ demand for higher compensation on longer-tenor securities. The trend also signals expectations of tighter financial conditions ahead, as the government continues to rely on domestic borrowing to meet its financing requirements.
Overall, the auction results point to a resilient demand for Treasury bills, even as interest rates adjust upward in response to evolving market dynamics and fiscal financing pressures.
