The government has recorded an 11th consecutive oversubscription on the Treasury bills market, with investor demand surging to nearly three-and-a-half times its target.
This 11th oversubscription was recorded even as interest rates fell sharply across all tenors, easing pressure on borrowing costs.
At last week’s auction, the government set out to raise GHS 5.0 billion, but investors submitted bids worth GHS 17.2 billion, producing a whopping 247% oversubscription. In the end, the government accepted GHS 5.8 billion, taking in GHS 0.9 billion more than planned, while rejecting bids amounting to GHS 11.4 billion.
This marks the 11th week in a row that demand has exceeded the government’s target, reinforcing the picture of deep liquidity in the market and sustained appetite for short-term government securities.
Demand was strong across all instruments. The 91-day bill attracted GHS 6.6 billion, the 182-day bill recorded GHS 3.7 billion, while the 364-day bill drew GHS 6.9 billion in bids, with the one-year paper once again emerging as a preferred option for investors seeking to lock in returns.
The auction also delivered further relief on the interest rate front. Yields declined significantly across the curve, reducing the cost of new borrowing for the government.
The 91-day rate fell from 10.83% to 9.97%, the 182-day rate eased from 12.38% to 11.82%, while the 364-day rate dropped from 12.82% to 12.06%.
For government finances, the falling rates are particularly welcome. Lower yields mean cheaper rollover of maturing bills and reduced interest costs on new issuance, offering breathing space at a time when borrowing needs remain elevated.
While the sustained oversubscriptions and declining rates point to renewed investor confidence and improving market conditions, the scale of demand and repeated acceptance above target highlight the government’s continued reliance on the short-term domestic market to manage cash flow needs.
Meanwhile, the government plans to raise a target of GH6.4 billion in its upcoming auction this week.
