Government Ends 2024 with 9% Oversubscription in Final T-bill Auction
Treasury Bill Auction Exceeds Target Amidst Rising Interest Rates
- The Ghanaian government concluded 2024 with a successful Treasury bill auction
- The auction secured a total of GH¢4.6 billion, exceeding the target of GH¢4.3 billion.
- Treasury bills have become a crucial source of financing for the government
The Ghanaian government concluded 2024 with a successful Treasury bill auction, recording a 9% oversubscription.
The auction secured a total of GH¢4.6 billion, exceeding the target of GH¢4.3 billion.
While the oversubscription is positive, it came at a cost, with interest rates on all maturities increasing. The 91-day bill rose to 28.03%, the 182-day bill to 28.88%, and the 364-day bill to 30.07%.
This reflects a mix of investor optimism and caution, as higher yields drive demand despite the rising cost of borrowing.
Treasury bills have become a crucial source of financing for the government due to limited access to international capital markets and the domestic debt exchange program.
Looking ahead, Databank projects a potential reduction in Treasury bill issuances in 2025, aiming to bring the total stock to around GHS 200 billion.
The incoming government’s commitment to fiscal consolidation may also impact Treasury bill demand, although plans to scrap the E-levy and COVID-19 levy could introduce new budgetary considerations.
