Ghana’s Treasury bills market has bounced back sharply from last week’s funding squeeze, with investor bids surging to GH¢5.06 billion and allowing the government to raise GH¢4.40 billion, significantly above its borrowing target.
The latest auction marks a striking turnaround from the previous week, when the government accepted only GH¢1.77 billion against a GH¢2.75 billion target, leaving nearly GH¢1 billion unfunded despite a 6.3% oversubscription.
This time, the government targeted GH¢2.869 billion but received bids totalling GH¢5.0619 billion, representing an oversubscription of GH¢2.1929 billion, or 76.43%.
More importantly, the government accepted GH¢4.40031 billion, exceeding its target by GH¢1.53131 billion. It therefore raised 153.38% of its intended borrowing, while rejecting just GH¢661.59 million, equivalent to 13.07% of total bids.
The strong demand could provide welcome breathing room for the government’s fiscal operations, helping it meet expenditure commitments and manage near-term financing requirements without having to rely as heavily on alternative funding sources.
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However, the auction figures alone do not establish whether the additional borrowing reflects stronger cash needs or a deliberate financing decision.
The 91-day bill attracted the largest share of bids, accumulating GH¢3.3 billion, while the 182-day instrument attracted GH¢1.3 billion. The 364-day bill received GH¢469 million.
The surge in demand also coincided with marginal declines in yields across all three instruments, suggesting the government was able to raise funds at slightly lower interest rates than at the previous auction.
The yield on the 91-day bill declined from 4.6143% to 4.6042%, while the 182-day bill fell from 6.3193% to 6.2791%. The 364-day bill also recorded a decline, from 9.8017% to 9.7523%.
Although the yield reductions were modest, the combination of stronger demand and lower rates is potentially favourable for the government’s domestic borrowing costs.
For now, the latest auction offers a sharp contrast to last week’s shortfall: investors offered substantially more than the government sought, and the government accepted enough to exceed its target by more than GH¢1.5 billion.
