The Government of Ghana has surpassed its Treasury bill issuance target by an impressive GHS 550 million, according to the latest auction results released by the Bank of Ghana. This milestone underscores the strong investor confidence in government securities despite prevailing economic challenges.
The target for the auction was set at GHS 6.14 billion, yet the total bids submitted by investors surged to GHS 7.26 billion, marking a significant oversubscription. However, the government opted to reject bids totalling GHS 570.64 million, reflecting its strategic approach to managing public debt and borrowing costs.
Breakdown of Auction Results
A detailed analysis of the auction results reveals robust participation across all tenors of the Treasury bills:
91-Day Bills: Investors tendered bids amounting to GHS 5.32 billion, out of which GHS 5.21 billion was accepted.
182-Day Bills: Bids for this tenor reached GHS 1.56 billion, with GHS 1.29 billion being accepted.
364-Day Bills: This category recorded bids of GHS 381 million, with GHS 192 million accepted.
Interest Rate Trends
The auction also reflected a downward trend in interest rates, consistent with the government’s objective of reducing borrowing costs. The average yields across the curve ranged from 15% to 18%, with notable declines in the following:
91-Day Bill: Yield edged down to 15.32% from 15.45% the previous week.
182-Day Bill: Yield fell to 16.03%, down from 16.18%.
364-Day Bill: Yield dropped to 18.37% from 18.62%.
These declines signify increased investor appetite and confidence, coupled with the government’s efforts to maintain fiscal discipline.
Looking Ahead
In the upcoming auction, the Treasury aims to raise GHS 6.32 billion. The consistent oversubscription of government securities highlights a deepened trust in Ghana’s financial stability and its commitment to managing debt prudently.
As the government navigates the complexities of balancing fiscal sustainability with economic growth, its ability to attract strong demand for its securities remains a critical pillar in achieving its financial objectives.
Story by: Mercy Addai Turkson #ahotoronline.com
