Government falls short of Treasury Bill target after rejecting higher-rate bids

The government failed to meet its Treasury Bill target at last week’s auction after rejecting bids with higher interest rates, despite strong investor demand.

Data from the Bank of Ghana, cited by myjoyonline.com, showed that investors submitted bids worth GH¢4.16 billion across the 91‑day, 182‑day, and 364‑day Treasury bills.

Out of this total, the government accepted GH¢3.16 billion, falling short of its GH¢3.37 billion target by GH¢207.73 million.

Although bids exceeded the target, the Treasury did not accept them all. Some were rejected because they carried higher interest rates, a move aimed at keeping borrowing costs under control.

The 364‑day bill attracted the highest investor interest, with bids totaling GH¢1.86 billion. The government accepted GH¢1.10 billion.

The 91‑day bill received GH¢1.69 billion in bids, of which GH¢1.63 billion was accepted, while the 182‑day bill drew GH¢618.90 million, with GH¢435.82 million accepted.

This outcome marked a sharp contrast to the previous week’s auction, which recorded a 60.2% oversubscription.

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The shift suggests investors are becoming more cautious, demanding better returns amid inflation concerns, government borrowing needs, and expectations of lower policy rates.

Interest rates rose across all three tenors. The 91‑day bill increased from 5.73% to 5.87%, the 182‑day bill from 7.69% to 7.79%, and the 364‑day bill from 12.82% to 12.93%.

The government is expected to return to the market this week, seeking to raise GH¢5.67 billion through another Treasury bill auction to meet short‑term financing needs.

DR/SA

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