Government short-term securities continued to attract strong investor interest last week, enabling the Treasury to raise GH¢1.51 billion above its target at the latest auction.
Data from the Bank of Ghana shows that investors submitted GH¢9.10 billion in bids across the 91-day, 182-day and 364-day Treasury bills, of which GH¢9.08 billion was accepted. This resulted in excess demand of 29.41 per cent, marking the seventh consecutive auction in which demand has exceeded the government’s target.
Market analysts attribute the sustained appetite largely to improved liquidity conditions in the financial system, driven mainly by institutional investors.
The 91-day Treasury bill remained the most attractive instrument, drawing bids worth GH¢6.54 billion, almost all of which (GH¢6.53 billion) was accepted. The 182-day bill recorded bids of GH¢1.06 billion, with GH¢1.05 billion taken up, while the 364-day bill attracted GH¢1.50 billion in bids, of which GH¢1.49 billion was accepted.
Yields rose across most maturities, reflecting the strong demand environment. The 91-day bill increased by 6 basis points to 11.17 per cent from 11.11 per cent, while the 182-day bill also rose by 6 basis points to 12.56 per cent.
However, the 364-day bill bucked the trend, easing marginally by 3 basis points to 12.90 per cent from 12.93 per cent.
Analysts attributed this slight decline to pricing dynamics between investors and the Treasury. They note that as some investors are submitting bids above the government’s preferred yield levels in an attempt to secure higher compensation, the Treasury, on the other hand, appears to be rejecting these higher-priced bids in order to manage borrowing costs, leading to yield compression at the longer end of the short-term curve.
Looking ahead, the Treasury is targeting GH¢7.14 billion at its next auction across the three short-term instruments, as it continues to leverage favourable market demand to meet its financing needs.
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