Investors Cautious Ahead of 2026 Budget as T-Bill Demand Weakens – Databank

By Praisebell Rosemond Larbi

Investor sentiment toward Treasury bills remains subdued as the market grapples with tightening liquidity, weak demand, and rising yields ahead of the presentation of the 2026 National Budget. According to a new market update from Databank Research, the Treasury bill segment is expected to remain under pressure in the near term, with yields likely to continue edging upward despite easing inflationary trends.

Databank analysts say investors are holding back in anticipation of clearer policy direction from the upcoming Budget, which is expected to outline the government’s borrowing strategy, spending priorities, and fiscal consolidation path for 2026. “A clearer fiscal roadmap will be crucial in restoring a balanced demand-supply dynamic in the T-bill market,” the report indicated.

Last week’s auction highlighted the ongoing challenges facing the government’s short-term debt program. It marked the fourth consecutive undersubscribed auction, reflecting persistent caution among buyers. The Treasury succeeded in raising GH¢4.50 billion against a target of GH¢6.83 billion, representing a shortfall of 34%. The amount mobilised covered only 66% of planned issuance and 68% of upcoming maturities estimated at GH¢6.65 billion.

With demand weakening, yields rose across all segments of the curve. The 91-day bill climbed 11 basis points to 10.93%, while the 182-day bill also increased by 11 basis points to 12.61%. The 364-day bill gained 7 basis points to settle at 13.02%, reflecting the tight market environment and elevated investor risk perception.

Databank Research noted that investor caution is likely to persist until the government presents a credible fiscal plan capable of boosting confidence and stabilising the debt market. Although inflation continues to trend downward, a development typically supportive of lower yields, analysts say macroeconomic uncertainty and concerns about the government’s refinancing strategy remain key drivers of current market sentiment.

The firm added that the upcoming Budget will play a pivotal role in shaping expectations. Clear communication on borrowing levels, deficit targets, and debt management strategies could help moderate yields and attract stronger participation in upcoming auctions. Until then, analysts say, “the market will continue to price in elevated risk,” keeping yields under upward pressure.