Last week’s Treasury bill auction in Ghana highlighted the continued strength of system liquidity, as demand for short-term government securities far exceeded supply, driving yields lower across the curve.
According to market data, total bids hit GHS22.67 billion, more than double the GHS6.42 billion target, representing a 253% oversubscription. Despite this strong demand, the Treasury accepted GHS8.99 billion, rejecting GHS13.68 billion in bids. This resulted in a 1.40x cover on target and a 2.52x bid-to-cover ratio, underscoring investor appetite for Ghanaian government securities.
The auction also showed significant yield compression. The 91-day bill fell 136 basis points to 8.61%, the 182-day eased 114 basis points to 10.68 percent, and the 364-day declined 100 basis points to 11.06%. Analysts attributed the downward pressure to abundant liquidity in the financial system, further supported by coupon inflows from maturing instruments.
Looking ahead, the Treasury plans another auction on Friday, 20 February 2026, aiming to raise GHS9.32 billion through 91-day, 182-day, and 364-day bills to cover GHS9.13 billion in maturing debt. Market watchers expect the ample liquidity to persist, potentially sustaining a gradual decline in yields across the short end of the curve.
The strong investor response and declining yields reflect confidence in Ghana’s debt instruments, even as the central bank continues to monitor inflation and monetary conditions. For investors, the auction signals a favourable environment for short-term government securities, with high demand and attractive pricing dynamics.
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Ghana’s primary market for government securities plays a central role in managing public debt, funding government operations, and influencing monetary conditions. Treasury bills (T-bills) are short-term debt instruments issued by the government to meet liquidity needs, manage the debt profile, and provide a benchmark for risk-free short-term rates in the domestic financial system. They are issued in tenors of 91, 182, and 364 days, attracting both local institutional investors—such as banks, pension funds, and mutual funds—and retail investors seeking low-risk returns.
Over recent years, the T-bill market has been sensitive to systemic liquidity, monetary policy, and fiscal developments. Abundant liquidity typically drives strong demand for short-term instruments, pushing yields lower, while tighter conditions can lead to higher rates as the Treasury competes for investor funds. In Ghana, factors influencing liquidity include government expenditure patterns, inflows from donor agencies, external debt servicing, and coupon payments from maturing securities.
Historically, oversubscription in Treasury bill auctions signals investor confidence in the government’s fiscal management and the attractiveness of local instruments relative to alternative investments. Yield movements on T-bills also serve as a barometer for short-term interest rates, influencing borrowing costs for corporates and the pricing of money market instruments.
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The Bank of Ghana’s monetary policy stance, particularly decisions on the policy rate, has a direct impact on the T-bill market. While inflationary pressures and currency stability are key considerations for the central bank, short-term market liquidity often dictates yield movements in primary auctions. In periods of elevated liquidity, investors can bid aggressively, resulting in yield compression across all maturities, as was observed in the latest auction.
Looking at broader trends, Ghana’s T-bill market has become increasingly active, with both domestic and offshore investors participating, reflecting confidence in the stability of the instruments and the predictability of auction processes. The market also provides vital signals to policymakers, helping gauge appetite for debt, the effectiveness of fiscal measures, and the interplay between liquidity and short-term borrowing costs.
With upcoming auctions scheduled regularly, including the next Treasury bill sale on 20 February 2026, the primary market continues to play a critical role in debt management, investor engagement, and the broader functioning of Ghana’s financial system. For market participants, monitoring oversubscription levels, yield trends, and liquidity flows is essential to understanding the cost of government borrowing and the direction of interest rates in the near term.
