Government’s recent impressive outturn on the treasury markets has continued into another week as its latest Bills Auction (Tender 1939), held on January 24, 2025, exceeded the set target by over GH¢ 2 billion, signaling strong investor confidence in government securities.
Although government had sought to raise GH¢ 6.001 billion, a total of GH¢ 8.86 billion were tendered, with the government accepting GH¢ 8.16 billion, rejecting approximately GH¢ 700 million worth of bids.
Compared to Tender 1938, held a week earlier, demand showed a slight dip, with the previous auction recording GH¢ 8.89 billion in bids and GH¢ 8.83 billion accepted.
Of the GH¢ 700 million that was rejected, nearly GH¢ 500 million comprised 91-day bills as government accepted GH¢ 4.48 billion of the GH¢ 4.986 billion tendered. Additionally, of the GH¢ 2.11 billion worth of 364-day bills, government accepted nearly GH¢ 1.93 billion. Almost all of the 182 days bills were also accepted with GH¢ 1.756 billion of the GH¢ 1.758 billion making the cut.
The rejection of GHC 700 million worth of bids, a chunk having shorter tenure, could be deemed as a calculated approach by the government to balance funding needs while managing and ensuring competitive borrowing costs.
The weighted average interest rates of the three bills have still continued their upward trend, standing at 28.52%, 29.07%, and 30.41%, respectively.
Government has set a higher target of GHC 6.53 billion for the upcoming Tender 1940, scheduled for January 31, 2025.
With Treasury Bills remaining a cornerstone of the government’s financing strategy, the market will be closely watched to gauge investor sentiment and participation in the coming weeks.