Treasury bills receive massive oversubscription
Demand for treasury bills has seen a massive taste in the last few weeks as the government continues to record over 100% subscriptions of its target.
The results from the auction on February 21, 2025 showed that GH¢20.499 billion bids were tendered.
Out of this, the government accepted GH¢9.634.33 bids above its intended target of GH¢7.729 billion.
This means that the government rejected GH¢10.865 billion in bids.
The auction to be issued on February 24, 2025, showed that the 91-day and 364-day bills received the most bids.
The 364-day bill received bids tendered worth GH¢8.110.82 billion but accepted GH¢3.968.74.
The 91-day bill received bids tendered worth GH¢7.385.10 billion but accepted GH¢4.233.34 billion.
The 182-bill however received tenders worth GH¢5.003 billion but accepted only GH¢1.432.35.
Interest rates on the other hand have reduced marginally in the last few weeks.
Currently, the rate for the 91-day bill stands at 24.47%, down from last week’s 26.85%, while the 182-day bill fell to 25.38% from 27.80% last week.
The interest rate for the 364-day bill also reduced from 29.07% to 27.29%.
Last week, the government sold GH¢9.434 billion out of the GH¢17.699.41 billion tendered.
The recent appetite for short-term instruments indicates strong investor confidence.
The government’s rejection of excess bids signals either a cautious borrowing approach or an effort to avoid high interest rates.
Meanwhile, the government intends to borrow GH¢6.493 billion in its next auction.
Treasury bills remain the government’s primary source of borrowing until it regains access to the international capital market.
SSD/MA
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