Treasury bills were oversubscribed in last week’s auction
The government plans to borrow GH¢8.068 billion in its treasury bill auction on February 14, 2025.
Last week, the government recorded an oversubscription in its treasury bill auction but rejected excess bids worth GH¢2.9 billion. It had set a target of GH¢7.258 billion but received over GH¢10.55 billion in bids.
However, it accepted only GH¢7.650 billion from the 91-day and 182-day bills.
The February 7, 2025, auction saw strong demand for the 91-day bill, with GH¢6.139.35 billion in bids tendered, of which GH¢3.877.25 billion was accepted.
For the 182-day bill, GH¢4.419 billion in bids were tendered, but only GH¢3.773.48 billion was accepted. There were no bids for the 365-day bill.
Interest rates for the bills dropped marginally in the auction issued on February 10, 2025. Currently, the rate stands at 27.98% for the 91-day bill and 28.68% for the 182-day bill.
The government’s rejection of excess bids signals either a move to borrow cautiously or an effort to avoid the current high-interest rates.
Although interest rates are currently higher than the inflation rate, they will increase the government’s cost when the bills mature.
The recent oversubscription also indicates strong investor confidence in short-term instruments.
Treasury bills remain the government’s primary source of borrowing until it regains access to the international capital market.
SSD/MA
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