T-Bill auction exceeds target — Raise GH¢5.49bn as govt tightens yields

The Government, through the Bank of Ghana, has successfully raised GH¢5.49 billion from its latest treasury bills auction, exceeding its target of GH¢3.86 billion. 

According to official auction results published by the Bank of Ghana, bids tendered across the 91-day, 182-day and 364-day tenors amounted to GH¢6.79 billion. Of this, GH¢5.49 billion was accepted, representing an acceptance rate of approximately 80.9 per cent.

The auction results show a notable compression in interest rates, especially on shorter-dated securities. The 91-day bill cleared at a weighted average interest rate of 10.29 per cent, down from 10.83 per cent the previous week. 

The yield band across the 91-day bills ranged from 8.70 per cent to as high as 25 per cent, but the Bank of Ghana allotted bids only between 8.89 per cent and 10.83 per cent.

Patterns

Similar patterns were observed on the 182-day and 364-day notes, where the highest bids of 15.5 per cent and 15 per cent were pared down to lower allotment bands between 10.41 per cent and 13.22 per cent, and 11.11 per cent and 13.80 per cent, respectively.

This decline in interest rates indicates investor willingness to accept lower returns in exchange for government credit exposure.

This outcome suggests that the government's efforts to manage borrowing costs amid macroeconomic adjustments and inflationary moderation are yielding positive results.

The government's ability to exceed its borrowing target and achieve lower interest rates is a positive development for the economy. 

Strategy

It suggests that the government's borrowing strategy is effective in managing borrowing costs and maintaining a stable debt profile.

The next auction, scheduled for August 8, 2025, with a target of GH¢8.59 billion, will be closely watched to see if this trend continues.

The auction results suggest a continuing effort by the Government to manage borrowing costs amid macroeconomic adjustments and inflationary moderation.

In the previous auction held on July 25, the government accepted GH¢15.16 billion out of a total tender of GH¢28.10 billion, revealing a more aggressive issuance stance that has since been tempered.

The next auction, scheduled for August 8, 2025, sets a higher target of GH¢8.59 billion, maintaining the government’s preference for short-term domestic borrowing to meet maturing obligations and manage liquidity.

Market watchers will be keenly observing whether the ongoing rate compression trend continues, especially as fiscal authorities weigh the balance between debt sustainability and market appetite in the second half of the year.