T-Bills Oversubscription: Primary Dealers Tender GHS 20.9bn Against GHS 5.4bn Target Despite Falling Yields
Appetite for Government of Ghana Treasury bills surged in the latest auction as primary dealers tendered bids totalling GHS 20.9 billion, nearly four times the GHS 5.4 billion target set by the government.
Out of the total bids submitted, the Government accepted GHS 10.64 billion, representing approximately 50% of the total amount tendered.
The 91-day bill garnered the highest investor interest, attracting GHS 13.7 billion in bids. Government, however, accepted GHS 5.6 billion.
Bids for the 182-day and 364-day bills amounted to GHS 4.2 billion and GHS 2.9 billion, respectively, with GHS 2.9 billion and GHS 2 billion accepted by the Government.
This heightened demand comes despite a general decline in interest rates across all tenors.
The yield on the 91-day bill declined sharply to 13.72% from 14.65% in the previous auction. The 182-day and 364-day bills also recorded yield drops from 15.02% and 15.41% to 14.6% and 14.7% respectively.
Market analysts attribute the strong investor demand to a recent sharp decline in interest rate of the Bank of Ghana’s policy tool – the BoG Bills – which until recently offered a return of 27%. The significant cut in BoG Bill rates has redirected investor flows toward Government short-term securities, which still offer relatively attractive yields.
Meanwhile, in the upcoming auction scheduled for Friday, July 25, the Government is seeking to raise GHS 7.7 billion from the domestic market.
