The latest treasury bill auction in Ghana ended in a 35 percent undersubscription, reflecting weakening investor appetite for government short-term debt. According to auction results, the Treasury received total bids of GH¢3.0 billion, out of which GH¢2.73 billion was accepted, against a target of GH¢4.24 billion. This marks a sharp drop compared to the stronger performance of August 8, when GH¢6.68 billion was accepted out of GH¢6.89 billion tendered.
Analysts say the undersubscription highlights a shift of funds into alternative investment channels, particularly fixed deposits and repos, which are currently offering more attractive returns. The lower participation suggests that investors are becoming cautious, even as the government continues to rely heavily on short-term borrowing to manage debt obligations.
A closer look at the auction breakdown shows mixed performance across maturities. The 91-day bill attracted GH¢2.05 billion in bids, with GH¢2.02 billion accepted. The 182-day bill saw GH¢678 million tendered, out of which GH¢537 million was taken, while the 364-day bill recorded GH¢272 million in bids, with only GH¢167 million accepted.
Yields continued to edge lower across all maturities, reinforcing the trend of declining returns. The 91-day yield dropped by 7 basis points to 10.13 percent, the 182-day slipped by 2 basis points to 12.23 percent, and the 364-day yield fell by 2 basis points to 13.08 percent. Market watchers note that the persistent fall in yields may be discouraging short-term investors who are seeking higher returns.
Looking ahead, the government is targeting GH¢6.42 billion in its next auction. This continued reliance on treasury bills underscores the state’s dependence on domestic borrowing to refinance maturing obligations and maintain liquidity, even as investor sentiment shows signs of softening.
Source: Citinewsroom