T-bill Auction Heavily Oversubscribed as Yields Decline
By Praisebell Rosemond Larbi
Government recorded a strong performance at its latest treasury bills auction, marking the fourth consecutive week of oversubscription and reinforcing signs of improving liquidity conditions and growing investor confidence in the domestic debt market.
The government had targeted GH¢3.7 billion from the sale, but total bids submitted reached GH¢5.6 billion, representing an oversubscription of about 47.7 per cent. Out of the total bids received, the government accepted GH¢5.3 billion, signalling continued reliance on the short-term market to meet funding needs while taking advantage of favourable pricing conditions.
Demand at the auction was strongest at the short end of the yield curve, with the 91-day bill attracting more than 45 per cent of total bids. Investors tendered approximately GH¢2.5 billion for the three-month instrument, of which GH¢2.3 billion was accepted. The strong appetite for the 91-day paper reflects a preference among investors for shorter tenors amid expectations of further easing in interest rates and ongoing efforts by banks to manage liquidity and balance sheet positions.
The 182-day bill also recorded solid participation. Total bids for the six-month instrument amounted to about GH¢1.52 billion, while accepted bids were estimated at GH¢1.45 billion. Although demand was lower than that of the 91-day bill, uptake remained strong, underscoring sustained investor interest across the short to medium segment of the market.
For the 364-day bill, bids tendered stood at approximately GH¢1.538 billion, with GH¢1.533 billion accepted. The near-full acceptance of bids for the one-year instrument suggests that investors remain comfortable extending duration, supported by expectations of macroeconomic stability and declining inflation.
Alongside the strong subscription levels, interest rates declined across the yield curve, continuing the downward trend observed in recent weeks. The yield on the 91-day bill fell by 3.0 basis points to 11.08 per cent. The 182-day bill also saw a marginal decline, with the yield easing to 12.43 per cent from 12.54 per cent in the previous week.
The most pronounced movement was recorded on the 364-day bill, where the yield declined by 17 basis points to settle at 12.91 per cent. This sharper drop at the long end of the treasury bill curve reflects growing confidence in the disinflation path and expectations that monetary policy easing will be sustained.
Market analysts note that the combination of strong oversubscription and falling yields points to ample liquidity in the banking system, supported by improved macroeconomic conditions, easing inflation, and greater certainty around fiscal and monetary policy direction. The trend also suggests that government borrowing costs in the short-term market are gradually easing, providing some relief to public finances.
However, analysts caution that sustained demand will depend on continued fiscal discipline and consistent policy signals. While near-term appetite for treasury bills remains strong, any sharp increase in issuance or shifts in liquidity conditions could influence investor behaviour in the weeks ahead.
Overall, the latest auction reinforces the view that confidence is returning to the domestic fixed-income market, with investors increasingly willing to deploy funds at lower yields amid expectations of stability and gradual economic recovery.
