The government’s treasury bills auction was oversubscribed for the second consecutive week, with investors submitting bids well above the target amount despite a rise in interest rates on parts of the yield curve.
Results released by the Bank of Ghana (BoG) showed that the government raised GH¢8.43 billion in bids against a target of GH¢7.42 billion, representing an oversubscription rate of 13.61 percent. Out of the total bids received, GH¢8.29 billion was accepted.
The 91-day treasury bill remained the most attractive instrument to investors, accounting for more than 71 percent of total bids submitted. Investors tendered GH¢6.03 billion for the short-term security, and all bids were accepted by the government.
The 182-day bill recorded bids worth about GH¢1.10 billion, of which approximately GH¢1.04 billion was accepted.
For the 364-day bill, investors submitted bids totalling GH¢1.29 billion. The government accepted a little over GH¢1.21 billion of the amount offered.
Despite the strong investor demand, borrowing costs increased on parts of the yield curve.
The yield on the benchmark 91-day bill rose by 3 basis points to 5.04 percent, compared with the previous auction. The 364-day bill also recorded a significant increase, with its yield climbing by 14 basis points to 10.97 percent.
The 182-day bill, however, bucked the trend as its yield eased marginally to 7.08 percent from 7.09 percent a week earlier.
By Ernest Kofi Adu