T-Bills oversubscribed by GH¢5.3bn as rate cut lowers yields

The money market sustained its positive momentum, recording strong investor demand following the Bank of Ghana’s 250 basis point reduction in the policy rate to 15.50 per cent.

The renewed appetite for government securities led to a further decline in Treasury bill yields, as total bids surpassed the government’s GH¢6.99 billion target by GH¢5.30 billion.

Figures from the Bank of Ghana show that bids for the 91-day, 182-day and 364-day Treasury bills amounted to GH¢17.1 billion, with GH¢12.31 billion accepted. For the second week in a row, the 364-day bill attracted the highest demand, with GH¢6.54 billion tendered and GH¢5.97 billion accepted.

The 91-day bill recorded GH¢5.91 billion in bids, of which GH¢2.79 billion was accepted, while the 182-day bill saw GH¢4.65 billion tendered and GH¢3.55 billion taken up.

On a week-on-week basis, yields declined across all tenors. The 91-day bill dropped by 37 basis points to 10.82 per cent from 11.19 per cent. The 182-day bill fell by 28 basis points to 12.38 per cent from 12.66 per cent, while the 364-day bill eased by 24 basis points to 12.82 per cent from 12.98 per cent.

Analysts attribute the sharp fall in yields to the recent policy rate cut, which has repositioned Treasury bill rates to remain relatively attractive. Improved system liquidity, driven by the central bank’s easing stance, has also increased money supply relative to demand, placing downward pressure on yields across the curve.

For the upcoming auction, the Treasury has set an issuance target of GH¢4.98 billion, which market watchers expect to be fully subscribed amid the current strong demand conditions.