Short-Term Debt Oversubscription Streak Continues as Treasury Gulps GHS 8.16 Billion
The Government of Ghana, through the Treasury, mobilized GHS 8.16 billion in its latest auction of short-term debt instruments, surpassing its target of GHS 6.01 billion by GHS 2.16 billion.
This marks the fourth consecutive week of oversubscription in Treasury auctions.
In the previous auction, the Treasury raised GHS 8.83 billion, exceeding its target of GHS 6.35 billion by 39.1%.
The strong performance in the latest auction underscores sustained investor demand for government securities despite rising borrowing costs.
Breakdown of Bids
The 91-day Treasury bill emerged as the most sought-after instrument, attracting GHS 4.47 billion in bids.
The 182-day and 364-day bills followed with GHS 1.75 billion and GHS 1.92 billion in bids respectively.
Yields Climb Across All Tenors
Yields edged higher across all maturities, reflecting inflationary pressures and investor expectations for better returns.
The 91-day bill saw a 10-basis-point rise to 28.51%, while the 182-day and 364-day bills increased by 9 basis points and 12 basis points to 29.06% and 30.40%, respectively.
The incremental rise in yields indicates heightened market expectations for risk-adjusted returns, amid concerns about inflation.
Market Confidence Despite Rising Costs
The robust subscription levels highlight continued confidence in the government’s ability to meet its debt obligations.
However, the rising yields point to an increasing cost of borrowing for the government as it seeks to address its short-term financing needs.
Next Auction Target Set at GHS 6.52 Billion
Looking ahead, the Treasury aims to raise GHS 6.52 billion in its next auction scheduled for January 31, 2025.
Domestic borrowing remains a cornerstone of the government’s fiscal strategy to meet immediate financing requirements.
The sustained interest in government securities will be critical in addressing budgetary constraints while managing the trade-off between higher borrowing costs and funding availability.
