Ghana Turned Down Bids of GHS2.9bn In T-Bills

In an auction with a 40.5% oversubscription, the Ghanaian government recently turned down bids for Treasury bills (T-bills) totaling GHS 2.9 billion.

The government accepted GHS 7.7 billion of the GHS 10.6 billion that investors tendered, rejecting the remaining GHS 2.9 billion, despite initially aiming for GHS 7.3 billion.

Investors’ demands for higher interest rates than the government was prepared to provide led to this rejection. As part of its efforts to achieve fiscal consolidation, the government hopes to normalize the yield curve and control borrowing costs by rejecting these high bids.

With bids totaling GHS 6.1 billion, of which GHS 3.9 billion was accepted, the 91-day T-bill drew the highest demand during the auction. The 91-day bill’s yield dropped to 27.98%, a decrease of 43 basis points.

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In a similar vein, bids totaling GHS 4.4 billion were received for the 182-day bill, of which GHS 3.8 billion was accepted. The yield dropped 21 basis points to 28.68%. Interestingly, no 364-day bills were issued by the Treasury during this auction.

In anticipation of sustained high demand, the government plans to raise GHC 8 billion at the upcoming T-bill auction.