Treasury bill auction oversubscribed by 11.9% as investor demand rebounds

Investor demand for Treasury bills rebounded strongly on the primary market last week, with the government exceeding its fundraising target.

The latest Treasury bill auction saw the government raise GH¢5.83 billion, surpassing its target of GH¢5.44 billion by GH¢389.86 million, representing an oversubscription of 11.9%.

The turnaround comes after two consecutive weeks of weak investor demand, signalling renewed investor appetite for short-term government securities.

Results released by the Bank of Ghana showed that investors submitted a total of GH¢6.09 billion in bids across the 91-day, 182-day and 364-day Treasury bill tenors, with the government accepting GH¢5.83 billion.

The 91-day Treasury bill continued to attract the strongest investor interest, drawing bids worth GH¢3.56 billion, of which GH¢3.51 billion was accepted.

Demand for the 182-day bill was also robust, with investors tendering GH¢1.71 billion. The government accepted GH¢1.68 billion of the bids received.

Meanwhile, investors submitted GH¢815.57 million for the 364-day bill, with GH¢640.25 million accepted.

Yields edged higher across the curve. The yield on the 91-day bill rose by 2 basis points to 5.01%, from 4.99% in the previous auction. The 182-day bill increased by 5 basis points to 7.09%, from 7.04%, while the 364-day bill climbed by 38 basis points to 10.84%, from 10.46%.

Analysts believe the gradual upward adjustment in yields is attracting investor funds, as reflected in the Treasury’s improving money demand.

Looking ahead, the government aims to raise GH¢7.43 billion.