The government achieved a slight oversubscription in its recent treasury bills auction, raising a total of GH¢4.195 billion against a target of GH¢4.035 billion. The majority of the bids, around 83%, or GH¢3.52 billion, came from the 91-day bill, with GH¢545.83 million tendered for the 182-day bill and GH¢128.52 million for the 364-day bill.
Despite this successful auction, it came at the cost of higher interest rates, continuing a trend seen over the past two weeks. According to the Bank of Ghana’s auction results, the yield on the 91-day bill increased by 33 basis points to 25.94%, while the 182-day bill rose to 27.03%, up from 26.90% the previous week. The 364-day bill also saw a 15 basis points increase, reaching 28.73%.
All bids submitted by investors were accepted, marking a successful auction for the government. However, the rising interest rates indicate that the government had to offer more attractive returns to entice investors. This means that while the government raised more funds than planned, it will also face higher costs in terms of interest payments to investors.
Treasury bills are short-term instruments that governments use to raise funds. The oversubscription means there was strong demand from investors, but the increased yields reflect the government’s need to pay more to secure these funds. This rise in yields shows that investors are seeking higher returns in the current economic climate.
