Government has raised more than its target in the latest Treasury bill auction, as investor bids for short-term government securities remained strong and yields declined across all three maturities.
The Treasury targeted GH¢2.87 billion but accepted approximately GH¢4.41 billion in bids across the 91-day, 182-day and 364-day instruments.
This represents an oversubscription of about 53.5% against the target.
The results point to sustained demand for government securities, even as returns on the instruments continue to ease.
The 91-day Treasury bill attracted GH¢3.29 billion in tenders, of which GH¢3.01 billion was accepted.
The 182-day bill received GH¢1.31 billion in bids, with GH¢1.26 billion accepted.
Demand was comparatively weaker for the 364-day instrument, which attracted GH¢468 million in bids. The government accepted GH¢136 million.
The acceptance pattern shows that the Treasury relied heavily on the shorter-dated instruments to meet its financing needs, while accepting less than a third of the bids submitted for the one-year bill.
Yields decline across all maturities
Yields fell across the three instruments, extending the downward movement in government borrowing costs.
The rate on the 91-day Treasury bill declined to 4.60% from 4.64%, while the 182-day rate eased to 6.28% from 6.32%.
The 364-day yield also fell to 9.75% from 9.80%.
Although the declines were modest, the movement suggests that investors were willing to accept slightly lower returns on government securities across the yield curve.
The difference between the short- and longer-dated rates remains substantial.
The 364-day bill offers a yield of 9.75%, compared with 4.60% on the 91-day instrument, reflecting the higher return available to investors willing to commit funds for longer.
Implications for government borrowing and investors
The auction results could support the government’s efforts to manage short-term financing costs, particularly if demand remains strong enough to sustain lower yields in subsequent auctions.
The latest results also highlight the importance of distinguishing between bids tendered and bids accepted.
While strong demand allowed the Treasury to raise more than its target, the relatively low acceptance of bids for the 364-day bill suggests a more selective approach to longer-dated borrowing.
Future auction results will be important in determining whether the decline in yields continues and how much room the government has to reduce its short-term borrowing costs.
For now, the combination of above-target borrowing and lower yields points to favourable demand conditions for the Treasury, although the sustainability of that trend will depend on investor appetite, liquidity conditions and the government’s financing requirements.