Investor appetite for Government of Ghana Treasury bills remained strong last week, with the latest auction attracting bids far above the government’s target despite a lower acceptance rate.
Results released by the Bank of Ghana (BoG) showed that investors submitted bids worth GH¢10.51 billion across the 91-day, 182-day and 364-day Treasury bills.
Against a target of GH¢5.87 billion, the auction was oversubscribed by approximately 79.2 per cent, underscoring continued confidence in short-term government securities amid ample liquidity in the financial market.
The government accepted GH¢8.65 billion of the bids, rejecting about GH¢1.86 billion, indicating a more selective approach to borrowing despite the strong investor demand.
The 364-day Treasury bill remained the most sought-after instrument, attracting bids totaling GH¢7.47 billion. Of that amount, the government accepted GH¢7.18 billion, accounting for the bulk of the funds raised at the auction.
The 91-day bill received bids worth GH¢2.27 billion, but only GH¢972.94 million was accepted.
Similarly, investors tendered GH¢757.93 million for the 182-day bill, with the government accepting GH¢501.38 million.
Yields moved in different directions across the three maturities.
The yield on the 91-day Treasury bill eased by two basis points to 5.76 per cent, down from 5.78 percent at the previous auction.
The 182-day bill also recorded a decline, with its yield falling by four basis points to 7.64 per cent from 7.68 percent.
In contrast, the yield on the 364-day bill edged up by two basis points to 12.98 percent, compared with 12.96 percent at the previous sale.
Market analysts say the latest auction reflects the continued abundance of liquidity within the banking sector, which has supported strong demand for government securities despite the gradual easing of interest rates.
They note that the longer-dated 364-day instrument continues to attract the strongest investor interest because it offers comparatively higher returns while remaining a risk-free investment backed by the government.
The strong subscription also suggests that financial institutions continue to maintain significant investments in Treasury securities even as private-sector credit expands on the back of improving macroeconomic conditions and lower lending rates.
For the next Treasury bill auction, the government is targeting GH¢6.22 billion through the issuance of the 91-day, 182-day and 364-day instruments.
The outcome will be closely watched for further indications of investor sentiment, liquidity conditions and the direction of short-term interest rates.
Source: businesspostonline
