T-bill auction fails to meet target for second consecutive week
By Praisebell Rosemond Larbi
The government has failed to meet its Treasury bill (T-bill) target for the second consecutive week, raising fresh concerns over investor appetite for short-term securities.
According to auction results released by the Bank of Ghana, the Treasury sought to raise GHS4.24 billion but secured just over GHS3 billion, representing a shortfall of nearly 30 per cent.
Market watchers say the undersubscription reflects investor caution, liquidity pressures and shifting demand dynamics in the fixed-income market.
The bulk of investor interest remained in the 91-day bill, which accounted for more than two-thirds of total bids.
Out of GHS2.0 billion tendered, the government accepted GHS2.02 billion, underscoring sustained demand for shorter tenors.
Analysts believe the 91-day bill continues to attract investors seeking quicker turnover and lower risk amid economic uncertainties.
For the 182-day bill, investors tendered GHS678.18 million, of which GHS537.69 million was accepted.
In the case of the 364-day bill, bids amounted to GHS272.58 million, but only about GHS167 million were accepted, reflecting weak demand for longer maturities.
Meanwhile, yields on the instruments showed mixed movements across the curve. The rate on the 91-day bill declined by 7.0 basis points to 10.13 per cent, extending its downward trend.
In contrast, the yield on the 182-day bill climbed to 12.23 per cent from 11.54 per cent the previous week, suggesting investors demanded higher returns for medium-term exposure.
The 364-day bill, however, saw a marginal decline in yield by 2.0 basis points to 13.08 per cent.
Market analysts note that while declining yields on shorter maturities point to improved borrowing conditions for government, the uptick in medium-term yields signals lingering investor concerns over fiscal risks and inflation expectations.
“The demand imbalance shows that investors are more comfortable with shorter exposures, even though government financing needs remain significant,” a market analyst observed.
The repeated undersubscription poses a financing challenge for the government, which relies heavily on T-bill auctions to meet its short-term funding requirements.
With borrowing costs fluctuating and appetite for longer-dated bills weakening, analysts say government may be compelled to revise its issuance strategy or enhance incentives to attract investors to longer maturities.
