The Government of Ghana is set to raise GH¢8.26 billion through treasury bills today, March 14, 2025, as it seeks to roll over GH¢7.91 billion in maturing bills.
The funds will be mobilized through the issuance of 91-day, 182-day, and 364-day treasury bills. While borrowing remains high, the declining cost of treasury bill yields in recent weeks provides some relief.
The cost of borrowing has been on a downward trend, with yields plummeting to nearly 16% last week. Analysts attribute this decline to a reduction in investor bids, as institutional investors shift to shorter-term securities for higher returns.
The Bank of Ghana’s 56-day bill surged by 65.81% week-on-week, reaching GH¢8.94 billion last week. This shift suggests that investors are gravitating toward shorter-duration securities, leading to a potential floor in treasury bill yields.
Analysts Expect Yields to Continue Declining
Research from Databank indicates that treasury yields may continue to decline despite concerns about inflation.
“We contend that despite a hawkish inflation rate, yields may continue to decline. Lingering ‘bid rejection phobia’ and rate uncertainty could delay stabilization, with the outlook hinging on the MPC’s upcoming MPR decision,” Databank Research stated.Last week’s treasury auction saw one of the sharpest declines in yields, as investor bids fell 43.5% week-on-week to GH¢10.31 billion.
However, the government managed to raise GH¢6.22 billion, surpassing its GH¢5.74 billion target and covering upcoming maturities of GH¢5.45 billion.
Current Treasury Bill Rates
The latest auction recorded significant declines in treasury bill yields:
• 91-day bill: 17.71% (-307 basis points)
• 182-day bill: 18.97% (-402 basis points)
• 364-day bill: 19.98% (-272 basis points)
With declining yields and shifting investor preferences, analysts believe treasury yields may stabilize in the near term. However, uncertainties surrounding the Monetary Policy Committee’s (MPC) next policy rate decision could influence further market movements.
As the government seeks to balance borrowing costs with investor sentiment, market participants will be closely watching upcoming auctions for further signs of rate movements.