Government Misses T-Bills Target for Sixth Straight Week Amid Falling Interest Rates-Ghana

The Government of Ghana has once again fallen short of its Treasury bill target, marking the sixth consecutive week of underperformance. According to auction data released by the Bank of Ghana, the government raised GH¢2.96 billion against a target of GH¢3.35 billion — an 11.56% shortfall. This trend signals ongoing investor hesitation despite full acceptance of all bids submitted during the period.

Investor appetite remained highest for the short-term 91-day bills, which attracted GH¢2.028 billion in bids, accounting for a dominant 68.37% of total subscriptions. The 364-day bill brought in GH¢316 million, while the 182-day bill saw significantly lower interest, drawing just GH¢622.79 million. This uneven demand highlights investors’ preference for shorter-term instruments amid market uncertainties.

Despite the under-subscription, yields continued to decline across the board. The 91-day bill fell by 14 basis points to 14.56%, while the 182-day bill eased to 15.01% from the previous week’s 15.25%. The largest drop was recorded on the 364-day bill, which declined by 58 basis points to 15.16%. This marks a consistent trend of softening interest rates over recent weeks.

Analysts and market watchers suggest that investors are holding out for better returns in an environment marked by tight liquidity. Many now prefer Bank of Ghana securities, which currently offer more competitive yields compared to government T-bills. This shift is influencing demand dynamics in the money market.

The consistent shortfall in T-bill targets could complicate the government’s short-term financing strategy. It may also prompt policymakers to reconsider auction strategies or offer more attractive rates to entice investors. As interest rates trend downward and liquidity remains tight, the coming weeks will be critical for gauging investor sentiment and market stability.

Source: Citi newsroom