T-Bills seen as safe haven in Ghana’s uncertain economic climate
Investors in Ghana have demonstrated their continued appetite for short-term debt securities, as the Bank of Ghana’s latest Treasury bills auction worth GH¢1,585.00 million was oversubscribed by 30.49%. At the close of the auction, T-bills worth GH¢2,048.17 million and GH¢538.13 million were accepted across the 91-day and 182-day bills, respectively. This was despite the accepted bids being marginally below tendered bids, representing a 99.95% acceptance rate.
The 91-day and 182-day T-Bills recorded gains of 9 basis points (bps) and 13 bps, respectively, in their respective yields, settling at 19.95% and 22.71%, reflecting the market’s favorable outlook for these short-term debt instruments. This underscores the increasing demand for safe and liquid assets amid a challenging macroeconomic environment characterized by rising inflation and a weakening currency.
Looking ahead, the Bank of Ghana has announced a target of GH¢1,585.00 million for the next auction (Tender #1849) covering 91-day, 182-day, and 364-day T-Bills. This signals the regulator’s commitment to maintaining a stable domestic debt market while financing the government’s fiscal operations.
The strong demand for T-bills is indicative of the investor preference for short-term and secure investment options amid a volatile economic climate. This trend is expected to persist in the near term, as investors seek to mitigate risks associated with long-term investments and inflationary pressures. The robust appetite for T-bills also bodes well for the government’s debt management strategy, which aims to reduce the cost of borrowing and extend the maturity profile of domestic debt.
