The Ghanaian government has wrapped up its final Treasury bills auction of 2024 with a 9% oversubscription, raising GH¢4.6 billion, surpassing its target of GH¢4.3 billion by GH¢383 million.

However, despite the strong outcome, the results reflect fluctuating investor sentiment in the aftermath of the country’s recent general elections.

The auction saw significant demand for the 91-day Treasury bill, which attracted GH¢3.8 billion in bids. The 182-day bill received GH¢628.16 million, making up 13.5% of total bids, while the 364-day bill garnered GH¢179.37 million, or 3.36% of the total.

Treasury bill rates also saw a consecutive rise, with the 91-day bill interest rate edging up from 27.85% to 28.03%, the 182-day bill rising from 28.68% to 28.88%, and the 364-day bill increasing from 29.97% to 30.07%. These higher yields are seen as driving demand despite the growing cost of borrowing.

The strong oversubscription signals a mix of investor optimism and caution, as the government’s reliance on T-bills as its primary financing tool continues following a series of sovereign credit downgrades and its exclusion from international capital markets.

Looking ahead, analysts at Databank project that the government may reduce T-bill issuances by up to GH¢20 billion in 2025, bringing the total stock to approximately GH¢200 billion, in an effort to explore alternative funding sources.

The incoming administration under President-elect John Mahama has indicated a strong commitment to fiscal consolidation, which could dampen demand and yields for short-term debt instruments, despite plans to abolish the E-levy and COVID-19 levy.

Source:TheDotNews