Treasury bill auction oversubscribed by 163% as investor demand surges

Last week’s Treasury bill auction recorded one of the strongest investor turnouts in recent years, with total bids exceeding the government’s target by 162.9 per cent.

Bank of Ghana data showed that investors submitted bids worth GH¢14.27 billion across the 91-day, 182-day and 364-day Treasury bill instruments, against a target of GH¢5.43 billion.

Despite the strong demand, the government accepted GH¢5.85 billion, rejecting bids valued at approximately GH¢8.41 billion.

The 364-day Treasury bill attracted the highest level of investor interest, with total tenders reaching GH¢9.94 billion. However, only GH¢2.69 billion was accepted.

The 91-day bill received GH¢3.12 billion in bids, of which GH¢2.40 billion was accepted, while investors tendered GH¢1.20 billion for the 182-day bill, with GH¢766.21 million accepted.

Yields Continue to Decline
The strong demand and improved liquidity in the financial system also pushed Treasury bill yields further downward.

The yield on the 91-day bill declined by 39 basis points to 5.07 per cent, from 5.46 per cent at the previous auction.

Similarly, the 182-day bill yield fell by 19 basis points to 7.07 per cent, compared with 7.27 per cent previously.

The 364-day bill recorded the sharpest decline, dropping by 91 basis points from 12.50 per cent to 11.59 per cent.

Market analysts have attributed the surge in liquidity partly to recent coupon payments under the Domestic Debt Exchange Programme (DDEP), which injected additional funds into the financial system and boosted investor appetite for government securities.

The improved liquidity has also strengthened the government’s ability to borrow at lower rates amid heightened demand for Treasury instruments.

At the next primary market auction, the government is seeking to raise GH¢5.15 billion through the issuance of 91-day, 182-day and 364-day Treasury bills.