Ghana’s Treasury bill market showed renewed investor appetite last week as the government recorded an 18.2% oversubscription, raising GH¢7.3 billion against a target of GH¢6.1 billion.
The Bank of Ghana accepted GH¢6.7 billion, rejecting GH¢570 million in excess bids marking the strongest performance in weeks after a period of sluggish demand.
The rebound comes alongside a continued decline in yields, with the 91-day bill dropping to 15.32% (from 15.45%), the 182-day bill falling to 16.04% (from 16.18%), and the 364-day bill easing to 18.37% (from 18.62%). Analysts view these trends as reflecting both improved confidence and the government’s deliberate push to reduce borrowing costs, with long-term ambitions to bring rates to single digits.
However, the central bank has sounded caution. Officials warn that persistently lower yields could trigger capital flight as investors seek higher returns in foreign currency assets a shift that might intensify pressure on the cedi. The currency has remained relatively stable in recent weeks, but excessive dollar demand could reverse these gains.
Market observers are now focused on the government’s next auction targeting GH¢6.3 billion. The outcome will test whether last week’s rebound signals sustained recovery or merely temporary fluctuation. For policymakers, the challenge lies in balancing affordable domestic borrowing with maintaining investor interest a tightrope walk that could define Ghana’s debt management strategy in the coming months.
Background: The T-bill market’s volatility mirrors broader economic tensions as Ghana implements post-IMF program reforms. While lower rates align with fiscal consolidation goals, overcorrection risks destabilizing the delicate equilibrium between debt sustainability and market confidence.
