The Ghanaian government is set to borrow GH₵3.89 billion in a treasury bills auction today, continuing its reliance on short-term instruments to meet financial obligations. This move followed a highly successful auction last week, which saw bids exceeding the government’s target by a significant margin.
In the previous auction, the government targeted GH₵5.54 billion but received total bids of GH₵5.97 billion, resulting in an oversubscription of approximately GH₵420 million The Bank of Ghana reported that the government accepted the full amount of GH₵5.97 billion, highlighting strong market confidence in its short-term debt instruments.
Breaking down last week’s results, GH₵4.58 billion out of GH₵4.95 billion in bids was accepted for the 91-day treasury bill. Similarly, all bids for the 182-day bill, totalling GH₵890 million, were accepted. For the 364-day bill, the government took GH₵499 million from bids worth GH₵698 million.
Market analysts attribute the oversubscription to a growing alignment between government issuance and market demand, which is partly influenced by end-of-month government spending needs. The robust investor interest signals a favourable outlook for the short-term debt market, even as expectations of a bond market reopening continue to grow.
Yield trends also indicate increasing investor confidence. The 182-day treasury bill rate declined by 13 basis points to 15.55%, while the 364-day yield dropped sharply by 78 basis points to 16.00%. Analysts believe this trend reflects the government’s strategy of selective acceptance of bids to manage borrowing costs effectively, coupled with modest yield compression in the market.
As the government moves to secure GH₵3.89 billion in today’s auction, investors and market watchers will be closely monitoring the outcomes for further insights into demand dynamics and yield trends. This auction will likely set the tone for subsequent market activities, particularly as the government balances fiscal needs with the need to maintain investor confidence.
Story by: Mercy Addai Turkson #ahotoronline.com
