Interest rates declined sharply across the short end of the yield curve, reinforcing expectations of lower lending rates by commercial banks and improved credit conditions for businesses and households.
According to data from the Bank of Ghana:
91-day Treasury bill yield fell by 215 basis points to 6.45%
182-day bill declined to 8.18%, down from 10.67%
364-day bill eased by 86 basis points to 12.93%
What this means
The sustained drop in yields suggests:
Lower borrowing costs for government, easing pressure on fiscal operations.
Potential reduction in commercial lending rates, as T-bill rates often influence pricing of loans.
Improved investor confidence, reflected in strong demand for government securities.
Strong investor appetite
The government recorded a 170% oversubscription, with total bids reaching GH¢25.20 billion, significantly above the auction target of GH¢9.322 billion.
However, only GH¢11.40 billion was accepted.
Breakdown of the auction:
SECURITIES | BIDS TENDERED (GH¢) | BIDS ACCEPTED (GH¢) |
|---|---|---|
91 Day Bill | 8.605bn | 3.187bn |
182 Day Bill | 7.219bn | 2.445bn |
364 Day Bill | 9.376bn | 5.777bn |
Total | 25.20bn | 11.40bn |
Target | 9.322bn |
The 364-day bill remained the most subscribed instrument, accounting for just over 37% of total bids, indicating investor preference for slightly longer-tenor securities despite falling yields.
Economic implications
Lower yields reduce government debt servicing costs.
Banks may adjust lending rates downward, stimulating private sector activity.
The strong oversubscription signals continued liquidity in the financial system.
If the downward trend persists, it could support broader economic growth by encouraging borrowing, investment, and expansion across key sectors.
