The government of Ghana plans to raise GH¢6.14 billion from the treasury market on Friday, March 21, 2025. This issuance will include 91-day, 182-day, and 364-day Treasury bills, aimed at refinancing GH¢5.90 billion in maturing obligations.
The target amount marks a decline from the GH¢8.77 billion raised earlier in the week, on Monday, March 17, 2025. Market watchers believe this reflects ongoing adjustments in government borrowing needs and market dynamics.
Yield Trends and Market Projections
Analysts project a continued downward trend in T-bill yields, though the pace of decline is expected to slow to between 100 – and 200 basis points. This signals a potential stabilization as the interplay of supply and demand reaches a new equilibrium.
Additionally, the declining volume of bids aligns with projections of a gradual yield floor forming, which could offer relief to the government by reducing borrowing costs. While the Monetary Policy Rate (MPR) remains detached from T-bill rates, Databank Research anticipates a moderate policy rate cut before the end of March. This move, if realized, could bolster the downward trend in yields and further ease borrowing pressures.
Last Week’s Auction Performance
During last week’s treasury auction, the government experienced an oversubscription of GH¢514 million, receiving total bids worth GH¢9.2 billion. However, this represented a 10.12% week-on-week decline in total bids. Ultimately, GH¢8.77 billion was accepted, exceeding the target of GH¢8.26 billion.
Broader Implications
The anticipated yield stabilization and potential rate cut signal the government’s commitment to managing debt servicing costs amidst economic pressures. This development is also expected to support economic recovery efforts by creating a favourable environment for private sector borrowing and investment.
The treasury market will remain a critical space to watch in the coming weeks as stakeholders assess the impact of these adjustments on broader fiscal and monetary objectives.
Story by: Mercy Addai Turkson #ahotoronline.com
