Investor demand for Treasury bills rebounded strongly at the latest primary market auction, with total bids exceeding the government’s target by 32.9%, marking a significant turnaround from the previous auction which recorded an undersubscription of about 4%.
Data from the Bank of Ghana show that investors tendered a total of GH¢3.66 billion across the 91-day, 182-day and 364-day Treasury bills, against a government target of GH¢2.75 billion. This resulted in an oversubscription of GH¢904.64 million. The government accepted a total of GH¢2.90 billion of the bids submitted, representing about 79.3% of total investor bids.
The 91-day Treasury bill attracted the largest volume of investor interest, with GH¢2.08 billion tendered, of which the government accepted GH¢1.88 billion. The 182-day bill received GH¢702.95 million in bids, with GH¢520.57 million accepted, while investors tendered GH¢876.72 million for the 364-day bill, of which GH¢497.74 million was accepted.
Yields Continue Downward Trajectory
The auction data also show that Treasury bill yields continued to decline across the curve. The 91-day yield fell by about 2 basis points to 4.67% from 4.69% the previous week. The 182-day yield declined by 11 basis points to 6.37% from 6.48%, while the 364-day yield dropped by 15 basis points to 9.83% from 9.98%.
The continued decline in yields reflects the broader monetary easing cycle that has characterised Ghana’s financial markets throughout 2026. The Bank of Ghana has reduced its benchmark Monetary Policy Rate by a cumulative 400 basis points this year, bringing it from 18.0% to 14.0% in March 2026.
Background: A Dramatic Shift from High Yields
The current low-yield environment represents a dramatic reversal from the situation just over a year ago. At the start of 2025, short-term government securities delivered outsized returns, with the 182-day bill yielding above 28%. The 91-day bill alone dropped from levels above 28% in late 2024 to single digits by early 2026.
This compression in Treasury bill rates has been driven by sustained disinflation and improved macroeconomic conditions. Headline inflation slowed sharply from 23.8% in December 2024 to 3.8% in January 2026—the lowest level since the adoption of inflation targeting. By February 2026, inflation had dropped to 3.3%, extending a fourteen-month disinflation trend.
The Bank of Ghana’s July 2026 Monetary Policy Report confirmed the trend, noting that the 91-day, 182-day and 364-day Treasury bill rates declined sharply to 5.3%, 7.2% and 11.3% respectively, compared with 14.7%, 15.3% and 15.8% a year earlier.
Market Dynamics and Investor Behaviour
The rebound in demand follows a period of volatility in the Treasury bill market. Earlier in 2026, the market experienced six consecutive undersubscribed auctions between January and April, during which the government raised about GH¢120.2 billion out of GH¢181.5 billion submitted by investors. By the final auction of March 2026, the market turned undersubscribed by 20.14%, signalling that prevailing yields were no longer compelling for some investors.
Analysts have attributed the latest oversubscription largely to a relatively softer government target compared with the level of demand that continues to exist in the Treasury bill market. The government’s decision to set a lower borrowing target of GH¢2.75 billion—down significantly from the GH¢4.63 billion target in early April—made it easier to achieve oversubscription even as yields continued to fall.
The dynamics also reflect a broader shift in investor behaviour. As Treasury bill yields compress, capital has increasingly rotated into equities in search of higher returns. The Ghana Stock Exchange Composite Index closed at 14,724.26 points in June 2026, compared with 6,248.48 points in June 2025, representing a year-on-year increase of 135.7%.
Fiscal Implications
The continued decline in Treasury bill yields carries significant implications for Ghana’s fiscal position. Lower yields mean reduced debt servicing costs for the government, translating into improved cash flow and fiscal breathing space. Former Finance Minister Alex Mould noted in February that falling interest rates would provide the government with lower debt servicing costs and improved cash flow.
Ghana’s public debt has fallen from 61.8% of GDP at the end of 2024 to 45.3% by June 2026, bringing the country into compliance with its statutory debt ceiling. The fiscal deficit narrowed to 2.4% of GDP from 6.3%, while the primary fiscal balance shifted from a deficit of 4.3% of GDP in 2022 to a surplus of 2.1% in 2025.
Outlook
For the next auction, the government is targeting GH¢2.24 billion through the issuance of 91-day, 182-day and 364-day Treasury bills. The lower target suggests the government is continuing its strategy of reducing reliance on short-term domestic borrowing as it benefits from improved fiscal space and lower financing costs.
The Bank of Ghana has paused its monetary easing cycle, keeping the policy rate unchanged at 14.0% during its July 2026 meeting. The central bank’s decisions in the coming months will be closely watched for signals on the future direction of interest rates and the sustainability of the current low-yield environment.
