Investor confidence returns with Treasury bill auction exceeding gov’t target by GH¢1.74 billion

• Ghana’s latest Treasury bill auction recorded GH¢7.02 billion in bids against a target of GH¢6.37 billion, signaling a strong rebound in investor confidence.

• The 91-day Treasury bill attracted the highest demand, while interest rates on all short-term instruments continued to decline slightly.

• Easing inflation, cedi stability and improving macroeconomic conditions are factors that are helping to restore investor appetite for government securities.

Investor confidence for Ghana’s Treasury bills has shown signs of recovery after weeks of weak participation which offers fresh relief to government financing efforts amid changing market conditions.

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According to results released by the Bank of Ghana, the government recorded total bids of GH¢7.83 billion in the latest Treasury bill auction against a target of GH¢4.35 billion, representing an oversubscription of about of 80%.

The Treasury accepted GH¢6.09 billion of the bids submitted. The recovery hints at a sharp turnaround from recent weeks when investor demand weakened and the government failed to meet its borrowing targets.

The recovery comes after several consecutive weeks in which government struggled to meet auction targets.

Data from previous auctions showed that government missed its Treasury bill target for seven consecutive weeks.

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The trend could be attributed to the weaker appetite to liquidity pressures and expectations of changing interest rate trends.

However, the latest turnaround suggests confidence may be gradually stabilising within the money market.

The 91-day bill once again emerged as the most attractive instrument, continuing a trend seen throughout the year.

It drew bids amounting to GH$5.72 billion, of which GH$4.37 billion was taken up.

The 182-day bill also attracted GH$0.65 billion in bids, with GH$0.57 billion accepted, while the 364-day bill saw GH¢1.46 billion in bids, of which GH¢1.14 billion was approved.

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The renewed demand may also reflect improving macroeconomic sentiment following Ghana’s recent economic recovery indicators, including easing inflation and relative currency stability.

Despite the fluctuations, Treasury bills remain one of Ghana’s most popular low-risk investment instruments among institutional and retail investors.