Investors offered more than government asked for at the October 16 Treasury bill auction, but the Treasury accepted only about two-thirds of the bids — a sign it is protecting Ghana’s low interest rate environment.
Ghana's government had more money on the table than it asked for last Thursday — and still walked away with less than it planned to borrow.
At the Treasury bill auction held on October 16, investors submitted bids worth GH¢5.17 billion across the 91-day, 182-day and 364-day bills. That was GH¢154.10 million above the government's target of GH¢5.02 billion, a bid-to-target ratio of about 103 per cent.
But the Treasury accepted only GH¢3.48 billion — roughly 69 per cent of its target and 67 per cent of all bids tendered. Some GH¢1.69 billion in investor offers was turned away, according to Bank of Ghana auction results reported by Norvan Reports.
Why the rejections matter
Treasury bills are short-term IOUs the government sells to banks, pension funds and individual investors to fund its budget. When an auction is oversubscribed, it usually signals strong appetite. This one shows that strong appetite does not automatically translate into borrowing.
The gap was about price. Investors wanted higher returns than the government was prepared to pay, so the Treasury simply refused the expensive bids.
Compare it with the previous week's auction on October 9. Bids then came to GH¢5.06 billion and government took GH¢4.40 billion — an acceptance rate of nearly 87 per cent. A week later, bids rose by 2.2 per cent but the amount sold fell by GH¢917.93 million, or about 21 per cent. The acceptance rate dropped to 67 per cent.
Short money is the cheap money
Demand clustered at the short end. The 91-day bill alone pulled in GH¢2.94 billion, nearly 57 per cent of all bids, and government accepted GH¢2.20 billion of that. It cleared at a weighted average interest-equivalent rate of 4.6235 per cent.
The 182-day bill drew GH¢1.11 billion, with GH¢692.30 million accepted at an interest-equivalent rate of 6.3154 per cent.
The one-year bill met the toughest treatment. Investors offered GH¢1.12 billion; government took only GH¢587.61 million, an acceptance ratio of about 53 per cent — the lowest in the auction. Its interest-equivalent rate was 9.7135 per cent, with some submitted discount rates stretching to 11.89 per cent.
In short, the longer the money, the more investors wanted — and the less willing government was to pay.
What comes next
For the next auction, Tender 2030, government has set a lower target of GH¢3.80 billion. That is GH¢1.22 billion below the October 16 target, but still GH¢315.61 million more than what was actually raised. The smaller target reduces pressure to accept high bids just to hit a published number.
The trade-off is real. Leaning heavily on 91-day paper keeps borrowing costs down now, but it means government must keep returning to the market every three months to roll over the same debt. For Ghanaians abroad watching cedi-denominated investments and interest rates, the next auction will show whether investors soften their demands or hold out for a bigger premium.
