Ghana’s T-Bill Auction Undersubscribed by 22% as Falling Yields Dampen Investor Appetite

Ghana’s latest Treasury bill auction closed with a 22.12% undersubscription, breaking a three-week streak of oversubscriptions. The Bank of Ghana (BoG) had aimed to raise GHS 8.58 billion but secured only GHS 6.69 billion. The shortfall came in the wake of declining yields, particularly on the 56-day bill, which reduced investor enthusiasm.

According to BoG data, the 91-day bill attracted bids worth GHS 5.02 billion, with GHS 4.99 billion accepted. For the 182-day bill, the government took GHS 1.23 billion from GHS 1.37 billion in bids, while the 364-day bill saw GHS 452 million accepted from GHS 490 million in bids. Despite reasonable interest in shorter maturities, the aggregate demand was well below target.

Market analysts attribute the undersubscription to the government’s persistent rejection of high-yield bids, aiming to control borrowing costs. Additionally, substantial liquidity flowed into BoG’s Monday and Wednesday auctions earlier in the week, raising about GHS 6.2 billion before the Friday sale. This likely diverted funds away from the main T-bill auction.

Yields on short-term securities continued to decline across the board, with the 91-day bill yield falling by 9 basis points to 10.20%, the 182-day bill by 10 basis points to 12.25%, and the 364-day bill by 14 basis points to 13.10%. Analysts note that the lower returns may further curb investor interest if the downward trend persists.

Looking ahead, the government has set a target of GHS 4.24 billion for the next auction. Market watchers will be keen to see if the reduced target and continued yield movements influence investor participation in upcoming sales.

Source: Citi newsroom