Interest rates on treasury bills have declined to 20.7% in the government’s recent auction on February 28, 2025.
Demand for short-term instruments has surged in recent weeks, with the government consistently recording over 100% subscription rates.
In this week’s auction, the government secured an oversubscription of 181%, receiving bids worth GH¢18.25 billion but accepting GH¢7.42 billion. A total of GH¢10.83 billion in bids was rejected.
The auction results released by the Bank of Ghana showed that the 91-day and 364-day treasury bills attracted the most interest.
However, the 364-day bill received bids worth GH¢8.72 billion, but only GH¢2.02 billion was accepted.
The 91-day bill received bids totaling GH¢6.21 billion, of which GH¢2.38 billion was accepted.
Additionally, the 182-day bill saw tenders amounting to GH¢3.32 billion, with GH¢3.02 billion accepted.
Meanwhile, interest rates have continued to decline over the past few weeks:
• The 91-day bill now stands at 20.79%, down from 24.47% last week.
• The 182-day bill has fallen to 22.98%, compared to 25.38% previously.
• The 364-day bill declined from 27.29% to 22.69%.
In the previous auction, held last week, the government sold GH¢9.63 billion out of GH¢20.50 billion in total bids.
The recent surge in demand for short-term instruments signals strong investor confidence. The government’s decision to reject excess bids suggests either a cautious borrowing approach or an effort to avoid high interest rates.
Meanwhile, the government plans to borrow GH¢5.74 billion in its next auction. Treasury bills remain its primary source of borrowing as it seeks to regain access to the international capital market.
Source: www.ghanaweb.com
