Gov’t T-Bill auction sees overwhelming demand, interest rates drop significantly

The Government of Ghana’s latest treasury bills auction saw exceptionally strong investor appetite, with bids exceeding the target by 246%. This surge in demand coincided with a sharp decline in interest rates across all maturities, signaling a positive market response to recent monetary policy.

According to the auction results released by the Bank of Ghana, the government set a reduced target of GH¢4.97 billion. However, it received total bids worth GH¢17.24 billion. Ultimately, GH¢5.82 billion was accepted.

The 364-day bill attracted the highest volume of tenders at GH¢6.94 billion, representing 40.2% of all bids, with GH¢2.00 billion accepted. The 91-day bill followed closely, receiving GH¢6.57 billion in bids, of which GH¢2.52 billion was taken. For the 182-day bill, GH¢3.72 billion was tendered and GH¢1.30 billion accepted.

A key highlight of the auction was the substantial drop in yields. The interest rate on the 91-day bill fell by 86 basis points to 9.96%. Similarly, the 182-day bill yield declined to 11.81% from 12.38%, and the 364-day bill eased by 76 basis points to 12.06%.

This downward shift in Treasury bill rates demonstrates a clear alignment with the recent reduction in the monetary policy rate, reflecting growing investor confidence and improved macroeconomic conditions.

Summary of Auction Results:

· 91-Day Bill: Bids Tendered: GH¢6.57bn | Accepted: GH¢2.52bn
· 182-Day Bill: Bids Tendered: GH¢3.72bn | Accepted: GH¢1.30bn
· 364-Day Bill: Bids Tendered: GH¢6.94bn | Accepted: GH¢2.00bn
· Total: Bids Tendered: GH¢17.24bn | Accepted: GH¢5.82bn | Target: GH¢4.97.