Treasury records strong demand as investors oversubscribe latest T-bill auction by GHC1.17bn
The government has recorded strong investor appetite for short-term securities for the second consecutive auction, with total bids exceeding the target by GH¢1.17 billion.
Data published by the Bank of Ghana showed that investors tendered a total of GH¢5.80 billion against a target of GH¢4.30 billion, representing an oversubscription of 34.8 per cent. Out of the total bids received, GH¢5.48 billion was accepted.
Despite the strong demand, the government rejected some bids, indicating a continued effort to maintain pricing discipline by avoiding relatively expensive offers.
A breakdown of the auction revealed that the 91-day Treasury bill attracted the highest demand, with total bids of GH¢3.83 billion, of which GH¢3.65 billion was accepted.
The 182-day bill recorded bids of GH¢709.83 million, with GH¢671.72 million taken up, while the 364-day bill saw GH¢1.26 billion tendered, out of which GH¢1.15 billion was accepted.
Market analysts suggest that increased demand for government securities may be linked to a shift by investors into safer assets, following recent weakness in the equity market and the relatively attractive returns offered by short-term instruments.
Despite the strong subscription levels, yields edged up across all maturities, reflecting continued market adjustments to inflation expectations ahead of the next Monetary Policy Committee meeting.
The yield on the 91-day bill rose by 3 basis points to 4.91 per cent, while the 182-day bill increased marginally by 1 basis point to 7.04 per cent, up from 7.03 per cent the previous week. The 364-day bill recorded the sharpest increase, rising by 25 basis points to 10.38 per cent from 10.13 per cent.
Looking ahead, the Treasury is expected to raise about GH¢4.49 billion at the next auction, as market participants continue to position themselves ahead of the upcoming Monetary Policy Committee decision on interest rates.
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