Ghana Treasury Bill Auction Records 4.1% Oversubscription Despite 40% Plunge in Bid Volume

Last week's Treasury bill auction, the final primary market sale for October, closed with a 4.1% oversubscription even as total bids tendered fell sharply by about 40% compared with the previous week, signaling a significant moderation in investor appetite for short-term government securities.

According to data from the Bank of Ghana, investors submitted total bids of GHS 2.55 billion against a target of GHS 2.45 billion . However, in line with the Treasury's selective acceptance strategy, the government accepted only GHS 1.92 billion, representing approximately 78% of its target and well below the volume of bids on offer .

The 91-day bill continued to attract the highest investor interest, drawing GHS 1.51 billion in bids, of which GHS 1.23 billion was accepted . The 182-day bill saw GHS 423.74 million tendered, with GHS 395.74 million accepted, while the 364-day bill attracted GHS 613.83 million in bids but only GHS 292.12 million was accepted—less than half of the amount offered .

The sharp decline in bid volume from the previous week's levels points to a cooling of the intense demand that had characterized earlier auctions. A separate report indicated that at the October 26 auction, total bids had reached GHS 4.3 billion, of which GHS 3.4 billion was accepted . The week-over-week drop suggests investors are becoming more cautious about locking in funds at current yield levels.

Cumulative October Performance

Across all primary market auctions in October, total bids reached GHS 19.97 billion against a cumulative target of GHS 16.27 billion, with the Treasury accepting GHS 14.97 billion over the period . This means the government rejected approximately GHS 5 billion in investor offers, while total acceptances fell about GHS 1.3 billion short of the cumulative target.

The Treasury's selective acceptance approach has kept yields compressed below the 5% to 10% range across the curve. The 91-day bill yield declined by one basis point to 4.60%, while the 182-day and 364-day yields fell by four and seven basis points to 6.26% and 9.60%, respectively . Some one-year bids sought discount rates as high as 11.50%, well above the 8.84% top rate allotted in full, indicating the government chose to prioritize keeping borrowing costs down rather than accepting all available funds .

Background: Policy Rate and Inflation Context

The yield compression comes against a backdrop of significant monetary easing by the Bank of Ghana. The central bank cut its benchmark policy rate by 150 basis points to 14.0% in March 2026, the fifth consecutive rate reduction, as headline inflation slowed to a 25-year low of 3.3% in February . The Bank subsequently paused its easing cycle in May, holding the rate at 14.0% .

The relatively low T-bill yields reflect both ample liquidity in the banking system and the government's deliberate strategy to contain its interest cost burden as it manages the domestic debt portfolio. Analysts have noted that competitive bidding and earlier bid rejections have pushed investors to submit lower rates to secure allocations, accelerating yield compression.

Next Auction Target

For the next auction, the government is targeting GHS 3.54 billion through the issuance of 91-day, 182-day, and 364-day Treasury bills . Market observers will be watching whether the moderation in bid volumes persists, which could signal a shift in investor sentiment as the year-end approaches.