Gov’t Records Strong T-Bill Demand, but Short-Term Yields Continue to Edge Up
By praisebell Rosemond Larbi
Government treasury bills continued to attract strong investor demand, with last week’s auction recording a 38% oversubscription, the second consecutive week of robust performance. However, despite the heavy bidding, yields on the 91-day and 182-day bills saw marginal increases, signalling persistent tightness in the short-term market and cautious investor sentiment.
Data released by the Bank of Ghana shows that government set out to raise GH¢5.80 billion but ended up receiving total bids worth GH¢8.01 billion. Out of this amount, GH¢6.95 billion was accepted, in line with government’s strategy to manage borrowing costs carefully while ensuring adequate short-term financing.
The 91-day bill once again dominated the auction, accounting for slightly over 61% of the total bids submitted. Around GH¢4.9 billion was tendered for the three-month paper, with government accepting GH¢4.0 billion. Analysts say the consistent investor preference for the 91-day instrument reflects both its lower risk profile and the market’s expectation that yields may continue trending upward in the coming weeks.
The 182-day bill also recorded impressive investor interest. Bids totalling GH¢2.09 billion were submitted, out of which government accepted GH¢1.85 billion. Participation in the 364-day bill remained strong as well, with GH¢1.01 billion tendered and a little over GH¢1.0 billion accepted. The near-full acceptance on the one-year paper suggests government is seeking to slightly rebalance its short-term maturity profile.
On the yield curve, movements were mixed but largely upward for the shorter tenors. The yield on the 91-day bill increased by 3 basis points to 11.08%, signalling that investors continue to demand slightly higher premiums in exchange for liquidity. Similarly, the 182-day yield rose to 12.55% from last week’s 12.43%, reinforcing the trend of upward pressure on returns for medium-tenor bills.
In contrast, the 364-day bill saw a decline in yield, falling from 13.08% to 12.70%. This drop may reflect improved confidence in the government’s medium-term economic outlook, or a deliberate attempt by authorities to keep longer-dated short-term borrowing costs contained.
Overall, the performance of the latest auction underscores a continued balancing act between strong market interest and the government’s effort to stabilise borrowing costs amid ongoing fiscal pressures.
