Credit: Kekeli K. Blamey
The government wrapped up 2024 on a strong note, with a 9% oversubscription in its final Treasury bills auction. The auction raised a total of GH¢4.6 billion, surpassing the target of GH¢4.3 billion by GH¢383 million.
The 91-day Treasury bill dominated the auction, attracting bids worth GH¢3.8 billion, while the 182-day bill contributed GH¢628.16 million, accounting for 13.5% of the total bids. The 364-day bill brought in GH¢179.37 million, representing 3.36% of the total.
However, this oversubscription came at a cost, as treasury bill rates saw another consecutive hike. The interest rate for the 91-day bill edged up from 27.85% to 28.03%, while the 182-day bill rose from 28.68% to 28.88%. The 364-day bill also increased, moving from 29.97% to 30.07%.
Despite the rising cost of borrowing, the results suggest a blend of investor optimism and caution, with higher yields driving demand. This performance sets the stage for 2025, with Treasury bills becoming the government’s primary financing tool.
Looking ahead, Databank projects that the government may reduce T-bill issuances by up to GHS 20 billion, bringing the total stock to around GHS 200 billion as alternative funding sources become available.
The incoming administration of President-elect John Mahama has also signaled a strong commitment to fiscal consolidation, which could lower demand and yields for short-term instruments.
