The government recorded another treasury bills oversubscription, receiving GH¢9.937 billion in bids against a target of GH¢6.554 billion, according to the latest auction results from the Bank of Ghana.
The amount tendered exceeded the government’s target by 51.6 percent. The government, however, accepted GH¢8.381 billion of the bids.
The latest auction points to continued investor appetite for government securities, even as returns on the instruments decline.
For the first time in several months, the 91 day bill attracted the largest share of demand, accounting for GH¢6.225 billion, or 62.6 percent of total bids.
The government accepted GH¢5.835 billion of the short dated instrument.
91 day bill leads demand
The 182 day bill received GH¢1.915 billion in bids, of which GH¢1.593 billion was accepted.
The 364 day bill attracted GH¢1.796 billion, while the government accepted GH¢952.77 million.
The figures suggest that investors are increasingly favouring shorter maturity instruments, possibly reflecting a preference for liquidity as market conditions continue to change.
The strong demand also gives the government room to raise funds beyond its initial target, although the decision to accept less than the total amount tendered indicates some selectivity in the auction.
Yields continue downward movement
Interest rates across the treasury bills yield curve continued to fall during the auction.
The yield on the 91 day bill declined by 14 basis points to 4.80 percent.
The 182 day bill also recorded a reduction, with its yield falling from 6.87 percent in the previous week to 6.67 percent.
The sharpest movement was recorded on the 364 day bill. Its yield dropped by 66 basis points to 10.11 percent.
The continued decline in yields means investors are accepting lower returns on government securities, even as demand remains strong.
For the government, the trend could help reduce borrowing costs. For investors, however, the lower yields may push some towards alternative assets as they reassess returns across the market.
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