Investor confidence evident as T-Bill auction exceeds target despite yield decline

Investor confidence evident as T-Bill auction exceeds target despite yield decline

On Friday, the Government successfully raised GHS 3.21 billion through its latest T-Bills issuance, exceeding its target of GHS 3.18 billion.

This achievement marks a 0.75% oversubscription rate, equivalent to GHS 24 million above the planned issuance, as reported by the Bank of Ghana (BoG) following the auction’s conclusion.

Despite a general downward trend in yields across the three tenors—91-Day, 182-Day, and 364-Day Bills—the auction experienced robust investor participation.

The 91-Day Bill, in particular, attracted the most substantial interest, securing GHS 2.49 billion in accepted bids. This was followed by the 182-Day Bill with GHS 636 million and the 364-Day Bill with GHS 82 million in successful bids.

In terms of yield performance, the auction saw declines across all tenors compared to previous results. The 91-Day Bill yield settled at 25.09%, representing a 10 basis point decrease.

The 182-Day Bill saw a more significant reduction, with yields dropping by 45 basis points to 26.94%. The 364-Day Bill yield also declined, albeit marginally, by 4 basis points to 27.95%.

These reductions reflect a broader trend of easing interest rates in the treasury market.

The oversubscription in the face of falling yields indicates strong demand and investor confidence in short-term government securities. This trend could be attributed to the relative security of T-Bills amidst broader economic uncertainties.

Looking ahead, the Treasury has set an ambitious target for its next auction, aiming to raise GHS 4.86 billion through the issuance of 91-Day, 182-Day, and 364-Day Bills. This planned increase signals the government’s ongoing need for liquidity to manage its fiscal policies and support economic activities.

As the financial landscape evolves, investor appetite for T-Bills will be closely watched, particularly in the context of yield adjustments and economic conditions. The next auction will serve as a critical barometer for market sentiment and government financing strategies.