Ghana’s Treasury Bill (T-Bill) interest rates have dropped for the third consecutive week as the government rejected a staggering GHC 8.2 billion in bids in the latest auction held last Friday, February 14, 2025. Results from Tender 1942, saw a continuation of the new government’s aggressive strategy to curb borrowing costs, as part of its debt management strategy.

Although, the auction attracted GHC 17.7 billion in total bids across 91-day, 182-day, and 364-day bill, the highest in months, government accepted just GHC 9.4 billion, prioritizing lower rates over raising excess funds. This is also a significant jump in rejections compared to the GHC 2.9 billion turned down in the previous auction (Tender 1941), further driving down rates, which peaked at 30% early this year.

For the 91-day bill, the weighted average interest rate fell from 27.98% in Tender 1941 to 26.86%, reflecting a continued decline. Similarly, the 182-day bill dropped from 28.69% to 27.81%, while the 364-day bill, which was reintroduced after being omitted in the previous auction, fell from over 30% to a lower yield of 29.07%. CediTalk learns, government’s is likely to return to an old practice of issuing 364-day bills every fortnight.

The continued decline in T-Bill rates coincides with a slowdown in Ghana’s inflation, which fell to 23.5% in January 2025, marking the first drop in five months. Non-food inflation declined from 20.3% to 19.2%, helping ease overall price pressures, though food inflation continued to rise, reaching 28.3%. With inflation showing signs of stabilizing, investors may now expect a less aggressive monetary policy stance from the central bank, reducing their demand for excessively high T-Bill returns.

For the upcoming Tender 1943, the government has set a slightly lower target of GHC 7.73 billion, indicating that it remains committed to carefully managing liquidity without overpaying for funds. If current trends continue, interest rates on T-Bills could see further declines as investors adjust to the government’s firm rejection of high-cost bids. However, the balance between reducing borrowing costs and securing sufficient funds remains delicate, and any unexpected economic shocks could shift the trajectory.

Meanwhile, finance minister, Dr. Ato Forson is expected to present the new government’s first budget on March 11, which could potentially paint a clearer picture of how much government will seek to borrow from the local market to fund potential deficits in the country’s budget.