The latest Ghana T Bill auction attracted GH¢11.6 billion in bids, nearly twice the government’s GH¢6.2 billion target, as strong investor demand allowed the Treasury to accept GH¢9.4 billion in fresh borrowing.
With GH¢6.1 billion in securities maturing, the auction increased the outstanding Treasury bill stock by a net GH¢3.3 billion. The bid to cover ratio stood at about 1.87, its widest margin since March.
The 364 day bill captured 52 per cent of all bids for the seventh consecutive week. That translates to roughly GH¢6 billion of the total amount tendered.
Investors appeared keen to “lock in elevated yields further out the curve” instead of concentrating entirely on shorter securities.
Rates Fall as Competition Increases
The auction recorded an aggregate yield decline of 24 basis points, the sharpest weekly fall in more than four months.
The upper range of yields demanded by investors compressed by 274 basis points, while the Ministry of Finance reduced its acceptance levels by about 21 basis points. Heavy bidding gave the Treasury room to reject expensive offers.
Strong demand does not erase the debt effect. Accepting GH¢9.4 billion against GH¢6.1 billion in maturities means government took on substantially more short term debt than it repaid during the week.
Next Auction Points to Smaller Addition
Government has set a GH¢5.99 billion target for the next auction, almost matching maturities of about GH¢5.9 billion.
Liquidity across the financial system is expected to keep participation strong. Recent maturities and limited competing instruments may support another oversubscribed sale.
Yields could ease moderately if demand for the 364 day bill persists. Tighter bank liquidity or weaker investor appetite, however, could slow that decline and place some pressure on shorter bills.
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