Ghana’s government fell short of its Treasury bill target last week, missing the mark by GH¢2.03 billion amid weakening investor appetite. According to the Bank of Ghana, the Treasury accepted bids totaling GH¢6.24 billion compared to a target of GH¢8.28 billion, representing a 24.59% shortfall. The undersubscription comes just a week after the market recorded its first oversubscription in months, raising fresh concerns about demand for short-term government securities.
The latest data shows investors tendered a total of GH¢6.50 billion across the 91-day, 182-day, and 364-day maturities. Out of this amount, GH¢6.24 billion was accepted by the Treasury. The breakdown reveals that GH¢5.25 billion out of GH¢5.49 billion was accepted for the 91-day bill, while GH¢784 million was taken from GH¢789 million submitted for the 182-day instrument. For the 364-day bill, GH¢209 million was accepted out of GH¢214 million tendered.
Market analysts attribute the undersubscription to persistent weak investor appetite and the government’s sizeable issuance targets, which have been driven by a heavy upcoming maturity profile. They warn that this trend could put additional pressure on the government’s short-term borrowing program unless investor confidence is boosted or targets are revised downward.
Despite the shortfall, yields on the short end of the curve showed mixed movements. The 91-day yield edged up by 11 basis points to 10.53% from 10.42% previously, while the 182-day yield rose slightly by 3 basis points to 12.44%. The 364-day yield slipped 2 basis points to 12.95%, reflecting what analysts describe as a deliberate effort by the Treasury to reduce borrowing costs as part of a broader debt management strategy.
Looking ahead, the government has set a lower target of GH¢3.01 billion for the next auction. Financial experts will be watching closely to see if the adjusted goal sparks stronger investor participation and stabilizes yields across the Treasury bill market.
source: citi newsroom