The rising demand for treasury bills is expected to be sustained in the coming week as T-bill yields are expected to be compressed further.

This follows a strong investor demand for last week T-bills auctioning in which the government exceeded its target by over 180%.

The yield also slumped across the yield curve, signaling the rising investor interest in the short-term securities.

Analysts believe the strong demand was driven by improved liquidity following the Domestic Debt Exchange Programme (DDEP) coupon payment, with investors increasingly rotating into the 364-day bill to lock in relatively attractive yields before further compression.

“Looking ahead, the supportive liquidity backdrop should sustain demand and keep downward pressure on T-bill yields”, Databank Research stated.

Last week, investor demand for T-bills strengthened further, with total bids rising 26.50% week-on-week to GH¢14.27 billion, against a GH¢5.43 billion target.

This translated into a 162.89% oversubscription.

The Treasury accepted GH¢5.85bn, exceeding its target by 7.86%.

The weight of demand drove another leg lower in yields, with the 91-day, 182-day and 364-day rates declining by 39 basis points, 19 basis points and 91 basis points to 5.08%, 7.08% and 11.59%, respectively.

Meanwhile, the Treasury plans to raise GH¢5.15 billion through the issuance of 91- day, 182-day, and 364-day bills to cover maturing bills of GH¢5.08bn.