Interest rates on treasury bills have declined to 19% in the government’s recent auction on March 7, 2025.
This significant decline marks the first time in 20 months that the government has experienced a decrease below 20%.
The demand for short-term instruments has surged recently, with the government consistently recording over 100% subscription rates.
In this week’s auction, the government secured an oversubscription, receiving bids worth GH¢10.30 billion but accepting GH¢6.221 billion. A total of GH¢4.08 billion in bids was rejected.
Auction results released by the Bank of Ghana showed that the 91-day bills saw the highest demand, receiving a total of GH¢6.00 billion in bids.
The 182-day bill received bids worth GH¢2.894 billion, but only GH¢842.61 million was accepted.
Meanwhile, the 364-day bill received bids totaling GH¢1.40 billion, with GH¢947 million accepted.
Interest rates have also seen a decline. The 91-day bill rate dropped from 20.79% last week to 17.71%. The 182-day bill fell to 18.96%, while the 364-day bill declined from 22.69% to 19.98%.
In last week’s auction, the government sold GH¢7.417 billion out of GH¢18.248 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¢8.260 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
