The continuous decline in interest rates is offering significant relief to the government, with borrowing costs easing sharply in the latest treasury bill auction.
According to data from the Bank of Ghana, yields across all short-term instruments declined notably.
The yield on the 91-day bill fell by 215 basis points to 6.45%, while the 182-day bill dropped to 8.18%, down from 10.67%.
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Similarly, the 364-day bill eased by 86 basis points to 12.93%, reflecting sustained investor appetite amid improving macroeconomic conditions.
170% Oversubscription Signals Strong Demand
The government recorded another strong auction performance, with treasury bills oversubscribed by 170%.
Total bids tendered amounted to GH¢25.20 billion, far exceeding the auction target of GH¢9.322 billion. However, the Treasury accepted GH¢11.40 billion of the bids submitted.
Breakdown of Auction Results
| Securities | Bids Tendered (GH¢) | Bids Accepted (GH¢) |
|---|---|---|
| 91-Day Bill | 8.605bn | 3.187bn |
| 182-Day Bill | 7.219bn | 2.445bn |
| 364-Day Bill | 9.376bn | 5.777bn |
| Total | 25.20bn | 11.40bn |
| Target | 9.322bn | — |
The 364-day bill emerged as the most subscribed instrument, attracting GH¢9.37 billion in bids — representing slightly over 37% of total tenders. The Treasury accepted GH¢5.77 billion of that amount.
For the 91-day bill, investors tendered GH¢8.605 billion, with GH¢3.18 billion accepted.
The 182-day bill saw GH¢7.21 billion in bids, of which GH¢2.44 billion was taken up.
What It Means for Government Borrowing
The sustained drop in yields suggests easing financing costs for the government, potentially reducing interest expenditure and supporting fiscal consolidation efforts.
Strong oversubscription also signals improved investor confidence in short-term government securities, amid expectations of continued monetary easing and stable inflation.
With borrowing costs trending downward and demand remaining robust, the Treasury appears well-positioned to manage short-term financing needs more efficiently in the near term.
Source: Accra Business News
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