Ghana’s Treasury bill (T-Bills) market is awash with liquidity, with investors offering nearly GH¢10 billion for short-term government securities.
This was about GH¢3.38 billion more than the government initially sought to raise.
According to the latest auction report published by the Bank of Ghana, the auction saw total bids reach GH¢9.94 billion, against a government target of GH¢6.55 billion, representing a hefty 51.6% oversubscription. The Treasury ultimately accepted GH¢8.38 billion, leaving about GH¢1.56 billion of investor demand on the table.
The strength of investor appetite is particularly striking because it came at a time when Treasury bill rates continued to decline across every maturity. The 91-day bill attracted GH¢6.2 billion in bids, while its interest rate fell from 4.9460% to 4.8050%. The 182-day bill accumulated GH¢1.9 billion, even as its rate dropped from 6.8587% to 6.6831%.
At the longer end, the 365-day bill attracted GH¢1.8 billion, while the corresponding 364-day rate fell sharply from 10.7778% to 10.1169%.
The development points to a market where liquidity is increasingly abundant relative to the government’s immediate financing needs. Investors appear willing to place substantial amounts of money in government securities even as returns decline, suggesting that the combination of safety, liquidity, and relatively attractive risk-adjusted returns continues to make T-bills compelling.
For the government, the development is significant. Strong demand gives the Treasury greater room to raise funds without having to accept every bid submitted by investors.
It also creates an opportunity to borrow at progressively lower rates, potentially reducing the cost of servicing short-term domestic debt.
But for the investors, however, the falling yields tell a different story. As more money competes for government securities, returns are being pushed down, forcing investors to accept lower income or look for alternative assets with higher returns.
