T-Bill rates continue to decline as government surpasses auction target

The government has once again exceeded its Treasury bill target, securing GHS 8.77 billion against a projected GH₵8.26 billion, reflecting an oversubscription of 6.22 per cent.

According to the latest auction results from the Bank of Ghana (BoG), demand for short-term government securities remains strong. 

The 91-day Treasury bill saw GH₵6.2 billion in bids fully accepted, while the 182-day bill attracted GH₵1.83 billion, of which GH₵1.80 billion was accepted. However, for the 364-day bill, the government only accepted GH₵746 million out of GH₵1.2 billion tendered.

Declining treasury bill rates

The auction results also show a continued decline in interest rates on Treasury bills, with average yields dropping across all tenors.

The 91-day bill fell by 186 basis points, settling at 15.88 per cent.

The 182-day bill declined by 204 basis points to 16.93 per cent.

The 364-day bill saw a 101 basis point drop, closing at 17.98 per cent.

This downward trend in rates aligns with the government's strategy to reduce borrowing costs as part of its broader fiscal consolidation efforts.

Despite the declining yields, demand for Treasury bills remains robust, indicating investor confidence in short-term government instruments.

Next auction target set at GH₵6.14 billion

Looking ahead, the government is aiming to raise GH₵6.14 billion in the next auction. The market will be closely monitoring the movement of rates, particularly as economic conditions evolve and the government continues to manage its debt sustainability measures.

With interest rates on a downward trajectory, investors will be weighing their options between locking in current yields and anticipating further declines in subsequent auctions.