Government exceeds treasury bills target as investor demand surges, but borrowing costs rise

The government recorded a strong investor response at its latest treasury bills auction, attracting bids well above its target. However, the increased demand came at a higher cost, with interest rates rising sharply across all tenors.

According to the auction results, investors submitted bids worth GHS7.37 billion, significantly exceeding the government's target of GHS4.60 billion. This represents an oversubscription of about 60%.

Out of the total bids received, the government accepted GHS6.01 billion, indicating it was able to secure more than its initial borrowing target while rejecting some offers.

The 364-day treasury bill attracted the highest level of investor interest, accounting for nearly three-quarters of all bids submitted. Investors tendered GHS5.43 billion for the one-year security, of which the government accepted GHS4.28 billion.

The 91-day bill also recorded strong participation, with bids totaling GHS1.47 billion. The government accepted GHS1.34 billion from these submissions.

Meanwhile, the 182-day bill received bids worth GHS461.91 million, with GHS378.80 million accepted.

Despite the strong demand, the government had to pay higher interest rates to attract investors. Yields increased across all three tenors, with the one-year bill recording the sharpest rise.

The yield on the 91-day bill climbed by 74 basis points to 5.73%.

The 182-day bill also saw its yield increase from 7.04% to 7.69%.

The biggest jump was recorded on the 364-day bill, where the yield rose by 237 basis points to 12.82%, marking the first time since January 2026 that the one-year treasury bill rate has approached 13%.