T-Bills Auction: Government Sees 39% Oversubscription, but Interest Rates Rise
High Demand for T-Bills Leads to Oversubscription, But Rising Interest Rates Fuel Concerns
- The government has recorded another impressive 39% oversubscription in its recent treasury bills
- The government raised GH¢8.890 billion from total bids
- The yield on the 91-day bill increased by 8 basis points to 28.41%
The government has recorded another impressive 39% oversubscription in its recent treasury bills (T-bills) auction, reflecting growing demand for the short-term instruments.
However, this surge in demand came at the cost of rising interest rates, which will contribute to increased interest payments for the government.
According to auction results from the Bank of Ghana, the government raised GH¢8.890 billion from total bids, primarily from banks, surpassing the target of GH¢6.353 billion. The government accepted GH¢8.839 billion in bids.
Of the total, GH¢5.6 billion came from the 91-day T-bill, accounting for 63.9% of all bids, with GH¢5.648 billion accepted. For the 182-day bill, GH¢1.318 billion was tendered, with GH¢1.307 billion accepted. For the 364-day bill, GH¢1.883 billion was tendered, with all bids accepted.
While demand remained high, interest rates surged again, raising concerns about the increasing cost of government debt.
The yield on the 91-day bill increased by 8 basis points to 28.41%, while the 182-day bill rate rose slightly to 28.97% from 28.96%. The rate on the 364-day bill climbed by 11 basis points to 30.17%.
