According to trading result by the Bank of Ghana, treasury bills were oversubscribed by 23.5%.

The government got GH¢6.507 billion from a target of GH¢5.269,returning to oversubscription after two weeks of undersubscription.

It however accepted GH¢6.33 billion of the total bids.

A little over 83% of the bids came from the 91-day bill.  About GH¢5.415 billion of the bids were tendered. The uptake was GH¢5.409 billion.

For the 182-day bill, GH¢941.71 million of the bids were tendered. The bids accepted were estimated to the tune of GH¢786.71 million.

Also, GH¢150.4 million of the bids were tendered for the 364-day bill. About GH¢140.4 million of the bids were accepted.

Meanwhile, the yield on the 91-day bill increased by 6.0 basis points to 10.53%.

That of the 182-day bill, however, went down to 12.30% from 12.35% the preceding week.

The yield on the 364-day bill increased by 9.0 basis points to 12.87%.

This follows an increase in yields on the shorter end of the treasury market.

According to auction results released by the Bank of Ghana, the government received GH¢4.38 billion in total bids but accepted GH¢4.36 billion.

A little over 82% of the bids came from the 91-day bill, with GH¢3.62 billion tendered and GH¢3.61 billion accepted. For the 182-day bill, GH¢576.7 million was tendered, out of which GH¢566.7 million was accepted.

In the case of the 364-day bill, GH¢187.2 million was tendered, with about GH¢182 million accepted.

Meanwhile, the yield on the 91-day bill increased slightly by a basis point to 10.42%, while the 182-day bill rose to 12.41% from 12.37% the previous week. However, the yield on the 364-day bill dipped by 2.0 basis points to 12.97%.

Source: Joy Business

The Treasury aimed to raise GH¢4.551 billion but secured only GH¢3.379 billion. Of this, it accepted GH¢2.952 billion.

Analysts say investor preference has shifted towards Bank of Ghana bills, which offer a 27% yield—well above the inflation rate of 18.4%.

The 91-day bill attracted the highest interest, with bids totalling GH¢2.418 billion (71.55% of total bids). The government accepted GH¢2.191 billion.

For the 182-day bill, bids stood at GH¢716.29 million, with GH¢603.74 million accepted.

The 364-day bill saw GH¢236 million in bids, out of which GH¢157.76 million was accepted.

Meanwhile, interest rates on the yield curve dipped slightly:

• 91-day bill: 14.69% (down 1 basis point)

• 182-day bill: unchanged at 15.25%

• 364-day bill: dropped to 15.69% from 15.74%

According to auction results published by the Bank of Ghana, investor demand for the short-term instruments remains subdued due to declining yields.

The government raised GH¢3.537 billion from the sale of treasury bills and accepted all bids submitted by investors.

A significant portion of the bids came from the 91-day bill, which accounted for GH¢2.697 billion—representing 76.2% of total bids.

For the 182-day bill, bids amounted to GH¢554.06 million, while the 364-day bill attracted GH¢286.17 million in tenders.

Meanwhile, interest rates continued their downward trend, effectively reducing the government’s cost of borrowing on the domestic market.

The yield on the 91-day bill declined by 13 basis points to 14.92%. The 182-day bill recorded a yield of 15.48%, down from 15.55% the previous week. Similarly, the 364-day bill dropped by 9 basis points to 15.91%.

This comes after investor demand for T-bills weakened last week, with total bids falling by 27% week-on-week to GH¢5.29 billion. The Treasury accepted GH¢4.73 billion—below maturities of GH¢6.09 billion and the GH¢6.32 billion target.

With inflation hovering around 22% and average yields estimated at 16%, the resulting negative spread of approximately 6% is discouraging investors.

Databank Research noted that earlier expectations of a demand rebound following the International Monetary Fund’s (IMF) positive review were dampened by reduced institutional offers, driven largely by negative real returns.

This contrasts with the robust GH¢12.44 billion uptake for the Bank of Ghana’s 56-day bill, which offered a more attractive yield of 28%.

Additionally, the allocation of the 364-day bill only to non-competitive bids at sub-17% suggests that the Treasury is seeking to reduce short-term borrowing costs and support favourable pricing for upcoming bond issuances.

In the short term, analysts anticipate modest yield declines, supported by further disinflation in the April 2024 inflation figures.

Last week, yields fell across the curve: the 91-day, 182-day, and 364-day bills declined by 9 basis points (bps), 26bps, and 142bps week-on-week to 15.23%, 15.77%, and 16.96%, respectively.

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“We expect the 100 basis points hike in the policy rate to sustain interest in Open Market Operations (OMOs) securities, draining demand for T-bills and stabilizing yields. However, the ongoing squeeze on public spending is expected to ease financing needs, preventing an upward spike in T-bill rates, barring any FX shocks,” noted IC Insights.

In the most recent auction, the government rejected GH¢2.37 billion in bids exceeding its yield corridor and accepted only GH¢1.69 billion out of a targeted GH¢4.39 billion. This partial uptake covered just 40% of the upcoming maturities worth GH¢4.22 billion, reflecting tighter supply conditions.

As a result, yields declined by 6.0 basis points on the 91-day bills, 23 basis points on the 182-day bills, and 1.0 basis point on the 364-day bills, settling at 15.65%, 16.50%, and 18.84%, respectively.

The significant bid rejections highlight a misalignment between investor yield expectations and the government’s yield objectives, particularly as the government plans to reopen the bond market.

Databank Research noted, “The gap between the Monetary Policy Rate and money market yields signals a policy rate disconnect—a short-term divergence intended to steer investor interest toward limited alternative assets. However, continued rejections could gradually deplete the Treasury’s liquidity buffers, tightening liquidity in the money market.”

The government plans to raise GH¢6.68 billion this week through the issuance of 91-day, 182-day, and 364-day bills to cover GH¢6.43 billion in maturing bills.

According to auction results from the Bank of Ghana, the government raised GH¢4.99 billion from the sale of short-term instruments but accepted only GH¢3.31 billion.

The 91-day bill accounted for the majority of the bids, with GH¢3.63 billion tendered, representing 72.7% of total bids. However, the government accepted GH¢2.33 billion.

For the 182-day bill, GH¢741.38 million was tendered, with an uptake of GH¢574.49 million. The 364-day bill saw bids worth GH¢622.7 million, but only GH¢406.07 million were accepted.

Meanwhile, interest rates remained relatively stable across the yield curve.

The yield on the 91-day T-bill declined by 12 basis points to 15.85%, while the 182-day bill remained unchanged at 16.92%. The rate on the 364-day bill fell slightly to 18.84% from the previous week’s 18.96%.

This amount is lower than the GH¢8.77 billion raised on Monday, March 17, 2025.

Analysts anticipate that yields will continue their downward trajectory, though the rate of decline is expected to slow to a range of 100–200 basis points. This indicates a new yield equilibrium as supply and demand stabilize.

The persistent decline in bids further supports analysts’ projections of a gradual yield floor forming.

Although the Monetary Policy Rate operates independently of Treasury bill rates, Databank Research suggests that an expected moderate rate cut by the end of the month could reinforce this trend, aiding broader efforts to reduce borrowing costs for both the government and the economy.

Despite an oversubscription of GH¢514 million, last week’s treasury auction recorded a 10.12% week-on-week decline in total bids, amounting to GH¢9.2 billion. Of this, GH¢8.77 billion was accepted, surpassing the GH¢8.26 billion target.

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According to auction results from the Bank of Ghana, the government sought to raise GHS 8.26 billion but received total bids of GHS 8.77 billion, resulting in an oversubscription of 6.22%.

All GHS 6.2 billion tendered for the 91-day Treasury bill was accepted. The 182-day bill attracted bids totaling GHS 1.83 billion, with GHS 1.80 billion accepted. Meanwhile, the 364-day bill received bids of GHS 1.2 billion, but only GHS 746 million was accepted.

Interest rates on Treasury bills continue to decline, averaging between 15% and 18%. The 91-day bill dropped by 186 basis points to 15.88%, while the 182-day bill fell by 204 basis points to 16.93%. The 364-day bill also saw a 101 basis points decline, settling at 17.98%.

However, the pace of rate decline appears to be slowing as the government works to reduce borrowing costs.

For the next auction, the Treasury aims to raise GHS 6.14 billion.

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Speaking at the opening session of the National Economic Dialogue on Monday, March 3, he emphasized the significance of this financial reprieve in supporting the nation’s economic recovery.

Dr. Forson explained that the savings from the lower T-bill rates would be redirected toward critical sectors of the economy to enhance development.

“The recent reduction in T-bills alone is saving Ghana about one billion Ghana cedis, and that money can be channeled to critical areas of the economy,” he stated.

He stressed that this move was essential for ensuring prudent fiscal management and reducing the government’s borrowing costs.

According to the Finance Minister, the government remains committed to implementing measures that promote economic stability and sustainable growth.

He highlighted the need for continuous fiscal discipline, adding that lower borrowing costs would ease the financial burden on the state and free up resources for productive investments.

Dr. Forson urged stakeholders to support ongoing economic reforms aimed at restoring macroeconomic stability.

He noted that while the reduction in T-bill rates was a step in the right direction, further policy interventions would be necessary to strengthen Ghana’s financial position.

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In a Facebook post on Sunday, March 2, he highlighted the government’s heavy reliance on short-term borrowing.

“As of the end of Friday’s auction, total borrowing from the T-bill market between January 10 and February 28 stands at GH¢67 billion,” he stated.

The revelation has sparked debate over the government’s fiscal strategy, with concerns about the sustainability of such high levels of short-term borrowing.

Treasury bills serve as a key tool for raising funds to finance government expenditures, but excessive reliance on them could put pressure on interest rates and inflation. Some economic analysts warn that this trend may lead to higher borrowing costs and reduced access to credit for the private sector.

Dr. Boako’s comments come ahead of Finance Minister Dr. Cassiel Ato Forson’s presentation of the 2025 budget, with stakeholders eager to see whether measures will be introduced to curb dependence on domestic debt.

The scale of borrowing so far has raised questions about how the administration plans to manage the country’s fiscal challenges while promoting sustainable economic growth.

With the budget presentation approaching, the government is expected to outline its broader economic strategy, including efforts to stabilize public debt. The coming weeks will be crucial in determining whether alternative revenue measures will be introduced to ease pressure on the treasury bill market and ensure long-term financial stability.

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This will cover GH¢7.24 billion in maturing bills.

However, the recent rejection of bids by the Treasury indicates that the government would not take all the bids that would be tendered.

This would compress excessive yields that have taken a nose dive for the last three weeks.

In a striking display of fiscal restraint, the Treasury rejected GH¢8.27 billion bids last week, marking its largest rejection since March 2023.

It accepted only GH¢9.43 billion from a total offer of GH¢17.70 billion, covering a target of GH¢8.07 billion and maturities worth GH¢7.54 billion.

This bold move led to yields on the 91, 182, and 364- day bills plummeting by 112 basis points, 88 basis points, and 130 basis points, to settle at 26.86%, 27.81%, and 29.07% respectively.

Analysts expect investors to reassess their yield expectations as the Treasury reinforces market discipline by rejecting high-yield bids and curbing excessive rate demands to contain borrowing costs.

This strategy to further is expected to drive yields further down.

According to auction results from the Bank of Ghana, the government recorded a 43.85% oversubscription of T-bills.

The government raised GH¢10.559 billion from the sale of short-term instruments but accepted GH¢7.650 billion.

A little over GH¢6.1 billion came from the 91-day T-bills, representing about 58% of total bids. The Treasury accepted GH¢3.87 billion.

For the 182-day bill, GH¢4.419 billion was tendered, with about GH¢3.7 billion accepted.

There were no bids for the 364-day bill.

Meanwhile, interest rates declined for the second consecutive week.

The yield on the 91-day bill dropped by 43 basis points to 27.98%, while that of the 182-day bill fell to 28.68% from the previous 28.89%.

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According to auction results from the Bank of Ghana, the government saw a 43.59% oversubscription in the sale of short-term instruments.

The government received an impressive GH¢9.372 billion, as demand for T-bills surged, surpassing the target of GH¢6.527 billion.

Of the total bids tendered, GH¢5.59 billion came from the 91-day bill, representing 59.64% of the total. GH¢5.224 billion of this amount was accepted.

For the 182-day bill, GH¢1.522 billion was tendered, with only GH¢531.4 million accepted.

Once again, the one-year bill attracted more bids than the 182-day bill, with GH¢2.259 billion tendered and over GH¢2.240 billion accepted.

Meanwhile, interest rates decreased for the first time in several weeks.

The rate for the 91-day bill fell by 10 basis points to 28.41%.

For the 182-day bill, the yield dropped to 28.89%, compared with 29.77% the previous week.

The interest rate on the 364-day bill also declined by 3 basis points to 30.37%.

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This is despite strong demand for the short-term instruments by the government to finance maturing bills.

Interest rates have been escalating since the beginning of this year, indicating some troubling times. They are now hovering around 29% on average.

Meanwhile, the government plans to borrow GH¢6 billion on Friday through the issuance of the 91-day, 182-day, and 364-day T-bills. This will settle GH¢5.60 billion in maturing bills.

There has been strong investor participation in T-bills lately, driven by the opportunity to capitalize on the high-interest rate environment. This is despite market expectations of a hold in this week’s monetary policy decision.

Analysts believe this trend is further supported by strong demand from the Treasury, amid significant upcoming maturities.

Last week, the government recorded its third consecutive oversubscription in the money market, accepting a total uptake of GH¢8.84 billion against a target of GH¢6.35 billion and upcoming maturities of GH¢5.53 billion.

Despite marginal rejections of the 91-day and 182-day instruments, yields continued to rise.

The 91-day, 182-day, and 364-day bills settled at 28.42% (+8 basis points), 28.96% (+1 bps), and 30.29% (+11 bps), week-on-week, respectively.

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This will be used to refinance maturing bills worth GH¢5.53 billion.

Analysts believe the increased participation in last week’s auction confirms renewed investor confidence and a desire to lock in current high interest rates.

Currently, Ghana stands out among 49 Sub-Saharan African countries for having one of the highest short-term yields and an attractive US dollar-adjusted rate, bolstered by the recent strong performance of the cedi.

Sustained participation is expected in the coming weeks, with yields likely to moderate due to strong demand.

Last week, the Treasury recorded an oversubscription of GH¢2.88 billion for the second consecutive time.

This surplus amount contributed to total accepted bids of GH¢8.08 billion against a target of GH¢5.20 billion and upcoming maturities of GH¢4.85 billion.

However, yields continued to rise, with the 91, 182, and 364-day bills settling at 28.33% (+14 basis points), 28.96% (+5 basis points), and 30.17% (+2 basis points), respectively.

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However, interest rates continued to surged, increasing the government’s cost of repaying the short-term instruments.

According to action results by the Bank of Ghana, the government got a remarkable GH¢8.075 billion from the sale of the short-term instruments though it was looking for GH¢5.198 billion to refinance the maturing bills.

The government accepted all the bills tendered.

A whopping GH¢5.513 billion came from the 91-day bills, representing 68.27% of the total bids.

About GH¢1.416 billion cedis were also tendered for the 182-day bill.

On the other hand, GH¢1.145 billion were tendered for the 364-day bill.

Meanwhile, interest rates edge further on the yield curve, raising questions about the increasing cost of domestic debt.

The yield on the 91-day bill rose by 14 basis points to 28.33%.

That of the 182-day bill also reached 28.96% from 28.91% the prior week.

Similarly, the interest on the 364-day bill went up by 2 basis points to 30.17%.

This is below the 2024 estimate of GH¢220 billion in 2024, translating to an average weekly uptake of GH¢3.9 billion versus GH¢4.2 billion, respectively.

Databank Research said with improving access to international funding and most macroeconomic indicators showing signs of sustained recovery, the government may likely pivot towards longer-term financing options.

However, this shift is expected to occur after the first quarter of  2025, as the treasury refinancing needs may keep demand for short-term funding elevated while it navigates maturities from high uptake in the second half of 2024.

Fixed income market to bounce back strongly in  mid-2025

Meanwhile, the easing inflation and policy measures to compress treasury bill yields is expected to influence the fixed income market strongly in 2025.

Despite anticipated easing inflation and a dovish monetary policy in 2025, Databank Research said it expects investor response to yield compression may be delayed until mid-2025.

“We believe that significant policy measures to reduce sovereign borrowing costs will be the main factor in the compression from a high of 27% as of November 2024. Additionally, the government’s hints at reducing reliance on money market funding, along with potential longer-dated securities issuances, suggest that any new initiatives are likely to occur by mid-2025, further supporting a potential decline in yields at that time”, it stated in a report.

It continued that the Treasury’s demand for money market funding to see ample decline on improving funds from other sources.

“In 2025, we foresee a notable moderation in the Treasury’s demand for money market funding, driven by improved access to alternative funding sources and a strategic pivot towards long-term securities. We expect the ample decline in demand to offer the treasury some space to trim high T-bill yields”.

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It got GH¢4.65 billion against a target of GH¢4.262 billion.

All the bids tendered for the short-term instruments were accepted.

A chunk of the bids came from the 91-day bill in which GH¢3.83 billion were received. This represented 82.6% of the total bids tendered.

About GH¢628 million were received for the 182-day bill.

For the 364-day bill, GH¢179.37 million were tendered.

Meanwhile, interest rates hit the 30% mark.

The yield on the 364-day bill surged to 30.07% from 29.95% the preceding week.

That of the 91-day bill increased by 18 basis points to 28.03%.

Similarly, the 182-day bill’s rate went up to 28.68%, from 28.57% the prior week.

Importantly, investor demand for the T-bills increased by 27.2% month-on-month in November 2024 but remained insufficient to fully cover the high auction target for the month under review.

According to the Bank of Ghana’s T-bill auction results, demand for the short-term instruments soared following successful general elections.

The government got GH¢8.20 billion from selling the short-term instruments.

All the bids were accepted.

A little over GH¢6.740 billion were secured from the 91-day bill, representing 82.1% of the total bids.

For the 182-day bill, GH¢951.67 million were tendered.

The 364-day bill also recorded GH¢508.15 million from the sale of the 364-day bill.

Meanwhile, interest rates neared the 30% mark.

The yield on the 91-day bill increased by 17 basis points to 27.77%.

That of the 182-day bill was 28.49% from the previous week’s 28.32%.

The interest rate on the 364-day bill also went up by 3.0 basis points to 29.94%.

Source: Joy Business

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This represented an undersubscription of 37.09%.

According to auction results by the Bank of Ghana, the government got GH¢3.83 billion from the sale of the short-term instruments.

This is against a target of GH¢6.098 billion.

All the bids tendered for the instruments were accepted. Once again, a chunk of the bids came from the 91-day bill.

A little over GH¢2.9 billion, representing 76.9% of the bids were accepted.

About GH¢ 669.37 were tendered for the 182-day bill.

For the 364-day bill, GH¢216.58 million were gotten.

Meanwhile, interest rates rose on the yield curve.

The yield on the 91-day bill went up by 0.40% to 27.36%.

That of the 182-day bill also increased to 28.09% from 27.78% the previous week.

For the 364-day bill, the interest rate also went up to 29.87% from 29.21% the earlier week.

According to auction results from the Bank of Ghana, the government raised GH¢6.413 billion, falling short of the target of GH¢6.89 billion.

The T-bills sale fell short of its target by about GH¢482 million, according to the results from the Central Bank.

All the bids were, however, accepted.

The 91-day bill saw bids worth GH¢4.244 billion, representing about 66.0% of the total bids accepted.

For the 182-day bill, about GH¢843 million was tendered by investors.

A little over GH¢1.32 billion came from the 364-day bill, but at a higher cost.

Meanwhile, interest rates continued to surge on the yield curve.

This is expected to increase the government’s interest payments.

The yield on the 91-day bill went up by 23 basis points to 27.19%.

That of the 182-day bill also increased to 27.98%, up from 27.78% the previous week.

For the 364-day bill, the interest shot up by 61 basis points to 29.82%.

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According to the auction results from the Bank of Ghana, the government secured GH¢5.180 billion, falling short of the targeted GH¢6.228 billion.

This auction comes after a private legal practitioner filed an application at the Supreme Court to stop the government from issuing Treasury bills.

The results indicated that all bids were accepted.

The majority of the bids came from the 91-day bill, with GH¢3.942 billion, representing 76.1% of the total bids, tendered.

Around GH¢653.43 million were tendered for the 182-day bill.

Similarly, the 364-day bill saw an offer of just over GH¢584 million.

Meanwhile, interest rates rose for the fourth consecutive week.

The increasing interest rates will raise the cost of servicing domestic instruments.

The yield on the 91-day bill increased by 14 basis points to 26.96%.

Likewise, the interest rate on the 182-day bill rose to 27.78%, up from 27.67% the previous week.

The rate for the 364-day bill also increased by 3 basis points to 29.21%.

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According to the auction results from the Bank of Ghana, the government raised GH¢5.825 billion from the sale of short-term instruments, surpassing its target of GH¢5.623 billion. All bids were accepted.

A staggering GH¢5.107 billion, about 87.67%, came from the 91-day bill. For the 182-day bill, GH¢560.07 million was tendered, while a little over GH¢157 million was offered for the 364-day bill.

Meanwhile, interest rates increased across the yield curve. Some analysts believe the government would have missed its target if interest rates had remained the same or decreased.

The yield on the 91-day bill rose by 26 basis points to 26.82%. The rate on the 182-day bill increased to 27.67%, up from 27.58% the previous week. The yield on the 364-day bill also shot up to 29.12%, compared with 28.97% the preceding week.

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However, this came at the expense of a rising interest rate

According to the auction results by the Bank of Ghana, the government got GH¢4.195 billion from the sale of the short-term instruments as against a target of GH¢4.035 billion.

All the bids tendered were accepted.

About 83% of the bids, approximately GH¢3.52 billion came from the 91-day bill.

GH¢545.83 million were tendered for the 182-day bill.

However, GH¢128.52 million were offered for the 364-day bill.

Meanwhile, interest rates surged on the yield curve for the second consecutive week.

The yield on the 91-day bill went up by 33 basis points to 25.94%.

The rate on the 182-day bill also increased to 27.03% as compared to 26.90% the previous week.

That of the 364-day bill also shot up by 15 basis points to 28.73%.

Source: Joy Business

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This is coming after the International Monetary Fund approved the third review of Ghana’s Economic Facility (ECF) Programme following the completion of the restructuring of Eurobonds.

The government recorded 1.08% more than the targeted amount of GH¢4.565 billion cedis.

All the bids tendered were also accepted.

About GH¢3.88 billion, representing 84% of the total bids came from the 91-day bill.

Approximately GH¢500.68 million cedis were tendered for the 182-day bill. For the 364-day bill, GH¢225.96 million cedis were received from the investors.

Meanwhile, interest rates shot up marginally on the yield curve.

The yield on the 91-day bill was up by 16 basis points to 25.61%. That of the 182-day bill also increased to 26.90%, from the previous week’s 26.80%.

The rate on the 364-day bill declined by 7.0 basis points to 28.58%.

Source: Joy Business

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According to the auction results from the Bank of Ghana, the government T-bills auction was undersubscribed by 38.55%

The government was seeking to raise GH¢ 5.980 billion but got GH¢ 3.67 billion.

All the bids tendered were accepted.

The majority of the bids came from the 91-day T-bill. This was about GH¢2.9 billion, representing 79.23% of the total bids.

A little over GH¢572 million came from the 182-day bill, while GH¢189.95 million were tendered for the 364-day bill.

Meanwhile, interest rates fell on the money market.

This is in line with a lower inflation compared to last year, though September 2024 inflation increased marginally.

The yield on the 91-day bills declined by 19 basis points to 25.45%.

That of the 182-day bill also fell to 26.80% from the previous week’s 26.92%.

The 364-day bill also dropped by 16 basis points to 28.51%.

Source: Joy Business

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According to the Bank of Ghana’s auction results, the government raised GH₵4.7 billion from short-term instruments, falling short of its GH₵7.4 billion target, resulting in an undersubscription of about 35.9%.

The 91-day treasury bill attracted the most interest, with all GH₵2.59 billion tendered being accepted. The 182-day bill secured GH₵830 million in bids, while the 364-day bill brought in GH₵1.3 billion.

Yields on treasury bills saw a slight increase, with interest rates ranging from 25% to 28%.

Market analysts attribute the undersubscription to the high auction target coupled with ongoing liquidity challenges.

The Treasury is expected to raise its borrowing target to GH₵5.98 billion in the next auction.

Source: Adomonline

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The strong demand amid tighter market liquidity is also making it difficult for yields to come down.

The Monetary Policy Committee (MPC) of the Bank of Ghana will meet this week to consider benchmark rate adjustments.

Most analysts expect the policy rate to remain steady notwithstanding the recent decline in inflation.

“Despite the Federal Reserve’s recent rate cut and disinflation trend, we expect the MPC to uphold a tight monetary stance in line with the IMF (International Monetary Fund) programme parameters, to control inflation expectations amid election-induced spending while adopting a forward guidance approach to tame cedi depreciation pressures”, Databank Research said.

The 91, 182, and 364-day yields increasing by 9.0 basis points, 2.0 basis points and 1.0 basis points, settling at 25.01%, 26.82%, and 28.08% week-on-week, respectively.

However, the Treasury fell short of its auction target of GH¢5.88 billion, raising only GH¢4.39 billion, resulting in a shortfall of GH¢1.49 billion.

Meanwhile, the Treasury plans to raise GH¢7.44 billion through the issuance of 91- day, 182-day, and 364-day bills this Friday September 27, 2024.

This will cover GH¢2.99 billion in maturing bills.

Source: Joy Business

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Treasury Bills accounted for 64.28% of volumes traded, whilst the government bonds contributed 34.08%, with corporate bonds making up the remaining 1.64%.

Year-to-date trading volume reached103.24 billion, marking a 99.47% increase over the 51.76 billion traded in the corresponding period last year.

GGBL, 4 others are top gainers

On the equities Market, the GSE Composite Index saw a 2.98% drop in August 2024 closing at 4,359.85 points, reducing the year-to-date gain to 39.28%.

The GSE Financial Stock Index increased by 0.77%, increasing its year-to-date gain to 11.38%.

The top price gainers for the month were GGBL (9.79%), Camelot (9.09%), BOPP (8.70%), Unilever (8.33%) and Enterprise Ghana Limited (6.45%).

On the other hand, MTN Ghana and CalBank lost 5.98% and 8.82% respectively.

On a while, a total volume of 652,798,625 shares valued at GH¢1,285,702,743.41 has traded so far this year, marking an 83.91% increase in volume and a 170.94% rise in value compared to the corresponding period last year.

According to auction results from the Bank of Ghana, the government’s target fell short by GH¢754.86, about 13.47% undersubscription.

The government secured GH¢4.84 billion from a target of GH¢5.604 billion.

All the bids tendered for the short-term instruments were accepted.

GH¢3.903 billion was tendered for the 91-Day Bill. This represented 80.49% of the total bids.

For the 182-Day Bill, GH¢748.58 million was tendered.

The 364-Day Bill received the lowest bid of GH¢197.11 million.

Meanwhile, interest rates went up marginally on the yield curve.

The yield on the 91-Day Bill went up by 2.0 basis points to 24.90%.

That of the 182-Day Bill remained relatively the same at 26.78%.

However, the 364-Day Bill increased slightly to 27.92% from the previous week’s 27.91%.

According to the latest data from the Bank of Ghana, investor interest in T-bills declined during the most recent money market auction, with total bids reaching GH¢5.3 billion, compared to a target of GH¢6.55 billion.

A significant portion of the bids focused on the 91-day bills, with all GH¢4.1 billion tendered being accepted. The government also accepted bids worth GH¢967 million for the 182-day bill and GH¢231.14 million for the 364-day bill.

Overall, the auction resulted in a 19.15 percent undersubscription, as interest rates on the money market, averaging between 24 and 27 percent, continued to decline.

The data shows a slight increase in interest rates due to tightening liquidity. The yield on the 91-day bill rose to 24.825%, up from 24.820% the previous week. The 182-day bill yield increased to 26.764% from 26.76% in the prior week. The 364-day bill yield remained relatively stable at 27.857%, compared to 27.85% the previous week.

Market analysts attribute this trend to the government’s large auction target and its recent decision to keep yields stable to reduce future debt servicing costs.

Looking ahead, the treasury plans to raise its borrowing target to GH¢4.97 billion in the next T-bill auction.

Source: Adomonline

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According to the World Bank, Ghana will rely mainly on T-bills, multilateral and other bilateral lenders for financing, until 2027.

From 2023 to 2026, the World Bank is expected to disburse about $3 billion, including about $1.5 billion for project loans, $1.15 billion for budget support, and $400 million for other projects.

Over the same period, the African Development Bank would disburse $338 million, of which $200 million would be earmarked for project loans and grants and $103 million for budget support during 2023-2024.

On the domestic side, the World Bank foresees a reintroduction of medium and long-term domestic debt issuance in 2025 as the domestic bond market is restored.

Government to raise GH¢78bn via T-bills in quarter 3, 2024

The government plans to borrow GH¢78.441 billion from the money market in the third quarter of 2024.

From that, GH¢53.807 billion will be used to rollover short-term maturities, while the remaining fresh issuance of GH¢24.633 billion will be used to meet its financing requirements.

This will be done through the issuance of the 91-day, 182-day, and 364-day bills weekly.

The issuance will be done through the primary auction, with settlement being the transaction date plus one business day.

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The February 2027 and February 2033 maturities dominated trading. This comprised 21.69% and 23.52% of the total volume, respectively.

The total volume exchanged rose by GH¢610 million to GH¢1.5 billion.

The short end of the LCY curve accounted for 56.48%, with the bell and tail end at 43.47% and 0.05%, respectively.

Analysts expect repo exchanges to continue to drive market activity, with trade concentration focused on Treasury bills and the shorter end of the yield curve.

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According to auction results from the Bank of Ghana, the government accepted all the bids for the short-term instruments.

It got GH¢3.86 billion from the sale of the financial instruments.

The shortfall may be largely due to its quest to keep interest rates down. GH¢2.904 billion was received for the 91-day bills.

That of the 182-day was estimated at GH¢698.50 million. For the 364-day bill, GH¢ 261.30 million was mobilised.

Meanwhile, interest rates remained steady across the yield curve. The yield on the 91-day bill was unchanged at 24.78%.

For the 182-day, the yield was 26.71%, from the previous week’s 26.74%. The one-year bill went for 27.80% from the preceding 27.78%.

From indications, the government may miss its 17.4 billion treasury target for this month.

According to auction results from the Bank of Ghana, the government got GH¢4.468 billion from the T-bills auction.

All the bids tendered were accepted.

About GH¢3.54 billion were received for the 91-day bill, representing 73.9% of the total bids.

With regard to the 182-day bill, GH¢782 million were mobilised. This constituted 16.33% of the total bids.

Also, GH¢165.3 million was gotten for the one-year bill.

Meanwhile, interest rates remained unchanged from the previous week.

The yield on the 91-day bill stood at 24.78%.

That of the 182-day bill was 26.74%.

The rate on the 364-day bill was also 27.78%.

In July 2024, the government requires an average weekly bid of GH¢3.5 billion to refinance maturing treasury bills.

Investors will however continue to favour the shorter end of the yield curve.

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According to the auction results by the Bank Ghana, the government recorded 1.38% oversubscription of the T-bills sale.

Liquidity has been very tight on the money market for some time now.

Per the results of the auction, investors showed more interest in the 91-Day bill than the other financial instruments.

About GH¢2.761 billion, representing 76.61% came from the 3.0 months instrument. The uptake was the same as the bids tendered.

For the 182-Day bill, GH¢660.62 million of the bids were tendered and all were accepted.

About GH¢182.4 million were also tendered for the 364-Day Bill. Again, all the bids were accepted.

But there was mixed development with respect to the yield curve.

For the interest rates, the yield on the 91-Day Bill went up slightly to 24.86%, from 24.85% the previous week.

That of the 182-Day Bill dipped by 2.0 basis points to 26.80%.

Similarly, the yield on the 364-Day Bill also went down to 27.78%, from 27.81% the preceding week.

According to the Bank of Ghana’s auction results, interest rates have remained stable.

The auction raised GH¢5.256 billion from the sale of these short-term instruments.

The bulk of the bids were for the 91-day T-bills, with GH¢3.39 billion—accounting for 64.67% of the total—being tendered.

All bids were accepted for the 91-day T-bills.

Similarly, GH¢1.689 billion was raised from the 182-day bills, with all submitted bids accepted.

For the 364-day bills, GH¢167.05 million worth of bids were tendered and all were accepted.

Meanwhile, interest rates remained consistent across the yield curve.

The yield on the 91-day bill held steady at 25.03%.

The yield on the 182-day bill stood at 26.93%, up slightly from 26.91% the previous week.

For the 364-day bill, the interest rate was 27.92%, marginally up from 27.90% the prior week.

The fresh borrowings were estimated at GH¢966.48 million.

The yields remained on the downward drift.

The 91-day and 182-day declined by 45 basis points and 70 basis points to 25.10% and 26.95% respectively.

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According to the auction results by the Bank of Ghana, the government got GH¢3.52 billion from the sale of the short-term instruments.

About GH¢2.715 billion, representing 77.02% came from the 91-day T-bill. The uptake was however GH¢2.710 billion.

For the 182-day bill, GH¢608.41 million were tendered. All the bids were accepted.

Similarly, GH¢201.49 million were received for the 364-day bill. Again, all the bids were accepted. Meanwhile, interest rates returned to their downward trajectory.

The yield on the 91-day bill declined marginally by 6.0 basis points to 25.03%.

That of the 182-day bill also went down to 26.91%, from 26.94% the previous week.

For the 364-day T-bill, the interest rate eased to 27.90% from the previous week’s 27.94%.

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Inflation took a nose dived in April 2024 to 25.00% from 25.80% in March 2024. The decline in the headline rate was occasioned by a 280-basis decrease in food inflation to 26.80%, while non-food inflation also fell by 90 basis points to 23.5%.

However, the month-on-month inflation for April 2024 stood at 1.80%, above the 0.80% recorded in March 2024.

“Our view hinges on a broadly favourable outlook with a decent risk premium spread, comparing the April 2024 annual inflation rate and prevailing T-bills yields”, Databank Research said.

Policy rate cut to remain same

The yield on the 364-day bill was unchanged at 28.00%.

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This is 21.61% lower over March 2023.

The government underperformed its target in four out of the five auctions settled in Apr 2024.

It missed the gross monthly target by 9.73% and 3.90% below the matured bills.

However, it remained focused on trimming T-bill yields in Apr 2024.

Whilst, the 91-day shed 45 basis points to close at 25.55%, the 182 and 364-day yields lost 85 basis points each to end the month at 27.65% and 28.25% respectively.

Notable upside pressures remain from inflationary risk in the recent increase of ex-pump fuel and transport prices.

However, analysts expect the favourable inflation outlook to augur well for treasury yields in the money market.

Meanwhile, T-bills were oversubscribed in last week’s money market auction, as total bids exceeded the treasury’s target.

The treasury accepted all bids worth GH¢3.47 billion, above the auction target by 17.07% and matured bills by 26.74%.

Yields persisted southward, with the 91-day falling 10 basis points to 25.45%.

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The Bank of Ghana (BoG) adjusted the Cash Reserve Ratio for banks beginning Monday, March 25, 2024.

The measures are banks with Loan to Deposit ratio above 55% will have to meet a CRR of 15%, banks with Loan to Deposit ratio between 40% and 55% will have to meet CRR of 20% and banks with Loan to Deposit ratios below 40% will be required to hold CRR of 25%.

GCB Capital said it sees the orientation gradually shifting towards a more aggressive credit stance, which will have ramifications for the government’s deficit financing operations and the real sector.

For the real sector, it pointed out that the competition for quality credit could drive down lending rates and, potentially, stimulate growth through increased investments.

“However, with banks dominating T-bill holding (banks held 35.3% of outstanding Future Value of T-bills as of February 2024), the anticipated reduction in demand for T-bills could result in a higher interest cost for the Treasury’s [government’s] funding operations immediately. With the BoG also facing high interest costs (around the policy rate) for its Open Market Operations (OMO) operations amidst the need to mop up excess liquidity to douse inflation, the directive will sweep substantial liquidity from the system (without the bank’s response) at no cost to the regulator”.

While total deposits of the banking sector grew by 25.5% year-on-year in February 2024 to GH¢224.4 billion (+GH¢45.6 billion), loans and advances grew by a paltry 1.77% year-on-year to GH¢74.8 billion (+GH¢1.3 billion).

Private sector credit also increased by 5% to GH68.8 billion (+GH¢3.3 billion) but contracted by 14.7% to GH¢331.1 million in real terms.

The data shows that banks have generally channelled their deposits into investment in Government of Ghana bills and BoG OMO bills, with the investment portfolio increasing by 67.6% year-on-year (+GH¢53.6 billion) amidst the increased aversion to loan book expansion due to the uncertain operating environment.

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This is about 35.80% more than the targeted amount of GH¢15.13 billion.

The majority of the bids came from the 91-day T-bill.

Analysts expect the uptake trend to continue in February 2024 as the treasury heads for an estimated cash coupon payment of about GH¢4.3bn on the new bonds.

However, yields are expected to decline as the market aligns with the disinflation trend combined with the 100 basis points cut in the monetary policy rate during the January 2024 Monetary Policy Committee decision.

Last week, investors oversubscribed the treasury’s offer in money market auction, as total bids reached GH¢4.53 billion against a target of GH¢2.86 billion.

The government accepted all bids.

Yields declined further as the 91-day and 182-day contracted to 28.30% (- 29 basis points) and 30.79% (-30 basis points) respectively. The 364-day yield closed lower at 31.40% (-40 basis points).

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This is 1.2% lower than that of December 2023.

Already, the government has raised GH¢3.223 billion in the first auction of 2024, 15.24% more than the targeted amount.

Based on the prevailing strong demand at an average of GH¢4.0 billion per week, analysts expect the authorities to comfortably refinance the upcoming maturities.

However, there are likely to be higher targets to finance the 2024 budget deficit and buffer for February 2024 coupon payments on the restructured bonds.

T-bills demand surged in December 2023

Demand for treasury bills remained generally strong in December 2023.

Investors submitted total bids of GH¢16.3 billion across the T-bills, representing an average weekly bid size of GH¢4.0 billion and exceeding the total maturities of GH¢12.8 billion.

The government accepted all bids tendered due to the high funding need for maturity refinancing.

Yields outturn was mixed in December 2023

Meanwhile, the yields outturn was mixed in December 2023 as downward pressure from the sharp disinflation offset the upward pressure from the increase in Cash Reserve Ratio.

The 91-day and the 364-day yields respectively trimmed 14 basis points and 74 basis points month-on-month to 29.4% and 32.5% while the 182-day yield gained 19 basis points to 31.9%.

According to auction results by the Bank of Ghana, the rate on the 91-day T-bill went up marginally to 29.56% from the previous week’s 29.49%.

The 182-day bill also surged to 31.76% from the preceding week’s 31.75% whilst the one-year bill increased by 21 basis points to 33.44%.

Meanwhile, the government accepted all the bids for the treasury bills tendered to the tune of ¢3.917 billion. Its ambitious target of ¢5.618 billion, however, fell short by 30.27%.

For the second time in a year, the 364-day bill was the most subscribed.  About ¢1.854 billion worth of bids were tendered which the government accepted all.

It was followed by the 91-day T-bill in which ¢1.33 billion were accepted. The 182-day bill witnessed a subscription of ¢722.99 million.

The treasury market is presently the only source of financing for the government as the bond and external debt markets have been shut down for now. This is due to the debt restructuring the government is undertaking.

The high yields on T-Bills given the difficult times the country finds itself is not helpful to the economy.

That aside, it also betrays government’s claim of ensuring interest payments reduction, expenditure reduction efforts and borrowing in the broader framework of working towards attaining debt sustainability of 55% of GDP by 2028.

Not reducing yields offered on short-term debt instruments like T-Bills, government risks increasing significantly its interest payments burden.

The continuous offering of high yields on T-Bills and the risk to increased interest payments is likely to result in the re-structuring of T-Bills by the government.

In as much as the Government disputes the possibility of re-structuring T-Bills – which is now its single major source of financing aside tax revenues and grants – the government hasn’t really made itself trustworthy to investors over the last two (2) years.

This, the Government has done by doing contrary to what it has publicly said it will not do. Cases in point include Government’s request for an IMF bailout despite initially vowing not to go for a bailout; undertaking haircuts on bond investments despite the initial promise not to do so; ongoing re-structuring of pension funds as part of Phase II of the DDEP despite earlier assurances by Government not to touch pension funds.

Hence, government’s assurances and promises not to re-structure T-Bills do not really hold. Investors are therefore cautioned to be mindful on how much of their funds they tie up in T-Bills.

Government, in the first six months of the year – January to July – has issued T-Bills to the tune of GHS 77.6bn.

Conservatively, interest payments (those paid and those yet to be paid) for the short-term debt instruments for the first six months amount to GHS 8bn.

Government has further announced to issue T-Bills worth GHS 38.9bn in the third quarter which is from July to September. Already some GHS 9.1bn in debt has been issued in the month of July, hence the remaining debt amount to be issued for August and September stands at approximately GHS 29.8bn.

Reduction in T-Bill Yields to 10% – 14%

Government has to reduce its high yields on T-Bills, currently, yields on the 91-day, 182-day, and 364-day t-Bills stand at 25.5%, 27.2%, and 30.4% respectively.

Government is advised to reduce yields on T-Bills to between 10% and 14% with yields on the 91-day, 182-day, and 364-day T-Bills being 10%, 12%, and 14% respectively.

As noted earlier, interest payments on T-Bills for the first six months total a conservative amount of GHS 8bn.

In the scenario that government reduced yields on T-Bills to between 10% and 14% from January to July, interest payments (those paid and those yet to be paid) by Government within the six months period would have totaled GHS 3.47bn.

This implies that Government would have saved some GHS 4.52bn in interest payments in the first six months of the year.

Admittedly, the reduction in T-Bill yields to the proposed new yields is likely to lead to reduced interest in Government T-Bills triggering under-subscription of the short-term debt instruments by investors.

However, the reduction in yields is a necessary evil given the need for Government to significantly reduce its interest payments burden as well as reduce its borrowing on the domestic debt market.

Commercial Paper as Alternative to T-Bills

Given the perceived risks in T-Bills, investors looking for short-term income should consider commercial papers issued by banks as an alternative to Government T-Bills.

The emphasis is particularly on bank commercial papers and not commercial papers issued by other businesses because, despite being massively hit by Phase I of the DDEP and recording huge losses, banks have quickly returned to being profitable and recording millions of cedis in net profit.

Given that banks are profitable despite the severe impact of the DDEP even amid the second phase of the DDEP, banks are less risky and more likely to be able to repay investors when issued commercial papers mature.

Other businesses are likely to be more risky and unable to repay issued commercial papers when they mature as businesses directly or indirectly impacted by the DDEP are believed to be still recovering from the debt exchange programme.

Additionally, the prevailing unfavorable business environment with high taxes stifling business growth and profitability is another reason why businesses – aside banks – are likely not to be able to honor payments on commercial papers when they mature.

Originally, commercial papers are supposed to have higher yields than T-Bills as they are deemed more risky than T-Bills (simply because the former are issued by corporations although both commercial papers and T-Bills are the same in characteristics). But given the current yields on T-Bills, yields on bank commercial papers are highly likely to be lower than that of T-Bills.

That notwithstanding, investors are encouraged to invest in bank commercial papers as T-Bills pose more risks to their funds.

Commercial papers usually have maturity periods below 270 days (nine months).

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