Ghana’s Treasury bill market is experiencing a surge in yields, driven by tight liquidity and cautious investor bidding. Analysts note that investors are now pricing their bids closer to the average lending rate of 27% . This trend is evident in the latest auction results, where yields on the 91-day, 182-day, and 364-day Treasury bills rose by 14, 11, and 9 basis points, respectively, closing at 26.97%, 27.79%, and 29.22%.
Despite the recent interlocutory injunction filed against T-bill auctions, demand for short-term securities remains steady. Databank Research forecasts that the upcoming auction will face minor shortfalls against the Treasury’s target, citing cautious bidding and close-to-month-end obligations as limiting factors.
In the previous auction, the Treasury accepted all bids totaling GH¢5.18 billion, falling short of its GH¢6.23 billion target. However, it successfully covered GH¢4.97 billion of upcoming maturities, resulting in a target coverage ratio of 0.83 and a maturity coverage ratio of 1.04.
This development comes after the Treasury exceeded its Q1 issuance target by GH¢8.25 billion in 2023, issuing a total of GH¢36.41 billion. The government has been tapping the Treasury bill market to refinance maturing obligations and build buffers, leading to a relatively high-interest burden.
As the market anticipates continued upward pressure on yields, the Treasury’s ability to meet its targets will be closely watched. With Ghana’s economy navigating challenges, the outcome of future auctions will be crucial in determining the government’s financing strategy.
Ruth Abla ADJORLOLO
