Treasury Exceeds Target in First T-Bills Auction For 2025, Raising GHS 5.37 Billion
The Treasury surpassed its target in the January 3, 2024, Treasury Bills auction by raising GHS 5.37 billion, GHS 1.04 billion more than the initial target of GHS 4.32 billion.
This strong subscription highlights continued investor confidence in short-term government debt instruments, reflecting an ongoing demand for safe investment opportunities.
In comparison to the previous auction, where the Government exceeded its target by GHS 383 million by securing GHS 4.64 billion against a target of GHS 4.26 billion, this latest auction demonstrated an even stronger appetite for Treasury bills.
The 91-day Treasury bill was the most popular, attracting GHS 3.53 billion in bids, showcasing investors’ preference for the 91-day bill.
The 182-day and 364-day Treasury bills also saw strong demand, with GHS 604 million and GHS 1.23 billion in bids, respectively.
Yield Adjustments Reflect Market Conditions
Accompanying the surge in demand was a modest adjustment in yields. The 91-day bill saw its yield rise by 16 basis points to 28.19%, the 182-day bill climbed by 23 basis points to 28.91%, and the 364-day bill edged up by 8 basis points to 30.15%.
These yield increases reflect the rising costs of borrowing in the context of fiscal consolidation efforts and the country’s overall economic conditions.
The yield adjustments indicate that investors are seeking higher returns due to the perceived risks associated with the country’s fiscal health and inflationary pressures. Nevertheless, the uptick in yields coupled with the increased subscription indicates a strong belief in the government’s ability to manage its debt obligations.
Outlook for the Next Auction
Looking ahead, the government plans to raise GHS 5.19 billion in the next Treasury Bills auction, scheduled for January 10, 2024. This continued strategy of tapping into the domestic debt market aims to manage government expenditure, pay down short-term liabilities, and meet immediate fiscal needs.
As the government continues to use Treasury Bills to meet its immediate fiscal needs, the success of these auctions plays a pivotal role in supporting the country’s financial stability and economic growth. With investor interest remaining strong, the government’s debt management strategy appears to be effectively balancing the need for funding with efforts to ensure fiscal discipline.
