The Ghanaian government fell slightly short of its treasury bill (T-Bill) borrowing target this week, raising GH¢4.6 billion against a goal of GH¢6.6 billion, despite a rebound in investor participation.
The Bank of Ghana’s latest auction report revealed investors tendered GH¢6.4 billion in bids, covering 97.5% of the target, but authorities rejected nearly 30% of submissions, signaling caution amid fluctuating market confidence.
Interest rates across all T-Bill tenures continued their incremental decline, reflecting the government’s broader strategy to reduce borrowing costs. The 91-day bill inched down from 15.4527% to 15.4522%, while the 182-day and 364-day bills eased to 16.1836% and 18.6206%, respectively. Government sources indicate ambitions to eventually lower these rates to single digits, a move aimed at easing fiscal pressures and stimulating economic activity.
However, the Bank of Ghana has reportedly expressed unease over the persistent rate cuts, fearing they could weaken the cedi as investors seek higher returns in foreign currencies. Such a shift could escalate demand for forex, further straining the local currency amid ongoing macroeconomic challenges.
Analysts note the mixed signals in this week’s auction: while bid volumes rebounded from prior weeks, the rejection of GH¢1.8 billion in bids underscores selective investor appetite. The government’s decision to accept only 70% of the total tendered amount highlights a balancing act between securing affordable credit and maintaining market stability.
With another auction targeting GH¢6.14 billion scheduled soon, observers are closely monitoring whether investor sentiment will stabilize or if caution will deepen. The outcome may hinge on broader economic indicators, including inflation trends and the cedi’s performance, which remain critical to shaping Ghana’s short-term fiscal strategy.
The gradual easing of T-Bill rates aligns with global emerging market trends, where governments increasingly prioritize sustainable debt management. Yet Ghana’s delicate dance between stimulating growth and safeguarding currency stability underscores the complexities facing policymakers in navigating post-pandemic recovery and investor expectations.
