T-Bill auction records 162.9% over subscription as yields fall amidst surplus liquidity

Ghana’s Treasury bill auction has recorded one of the strongest levels of investor participation in recent years, with total bids exceeding the government’s target by a remarkable 162.9%. The surge in demand comes amidst a backdrop of improved market confidence and significant liquidity injections into the financial system .

Data from the Bank of Ghana show that investors tendered GH¢14.27 billion across the 91-day, 182-day and 364-day Treasury bill tenors, against a government target of GH¢5.43 billion . Despite the robust demand, the Treasury accepted only GH¢5.85 billion in bids, rejecting approximately GH¢8.41 billion worth of investor submissions, a sign of cautious borrowing to maintain a downward trajectory on yields .

Investor Preference for Longer-Term Instruments

The 364-day Treasury bill attracted the largest share of investor interest, drawing GH¢9.94 billion in bids. However, the government accepted only GH¢2.69 billion of those offers . The shorter tenors also saw significant participation, with the 91-day bill receiving GH¢3.12 billion in bids (GH¢2.40 billion accepted) and the 182-day bill attracting GH¢1.20 billion (GH¢766.21 million accepted) .

Yields Continue to Compress

The strong liquidity in the market drove further yield compression across the Treasury bill curve, continuing a trend observed in recent months . The yield on the 91-day bill declined by 39 basis points to 5.07% from 5.46% at the previous auction. Similarly, the 182-day bill yield fell by 19 basis points to 7.07%, compared with 7.27% previously .

The 364-day bill recorded the sharpest decline, with its yield dropping by 91 basis points to 11.59% from 12.50% at the preceding auction . This decline is notable as the one-year instrument had previously been hovering near the 13% mark, and the fall suggests the government is successfully leveraging market conditions to lower its short-term borrowing costs .

DDEP Coupon Payments Boost Liquidity

Market analysts attribute the strong rebound in liquidity to recent payments under the Domestic Debt Exchange Programme (DDEP). The government successfully paid a substantial coupon amount to bondholders in August 2026, which injected significant additional liquidity into the financial system . This influx of cash has strengthened the Treasury’s ability to borrow at lower yields amidst heightened investor demand .

This is part of a broader trend of improved fiscal discipline and market confidence. The government’s ability to pay its DDEP obligations on time and in full has reinforced investor trust in Ghana’s financial credibility . Furthermore, the Bank of Ghana’s transition to a uniform 20% Cash Reserve Ratio (CRR) has simplified the regulatory framework and reduced the need for the central bank to sterilize liquidity through its own bills, making more funds available for the government’s T-bill market .

Looking Ahead

The government is seeking to raise GH¢5.15 billion through the issuance of 91-day, 182-day and 364-day Treasury bills at its next primary market auction. Given the current level of investor appetite and the prevailing market dynamics, the auction is expected to see continued strong participation.