The government has missed its treasury bill (short-term) target for the second consecutive week after a marginal oversubscription three weeks ago.
It appears investors are not attracted to the bills of the Central Bank, which has implications for the general economy.
After recording a shortfall of 37% two weeks ago, the bills have seen another undersubscription last week, missing the target by a little over 30%.
The latest auction report published by the Bank of Ghana indicates that the government planned to borrow an amount of GH¢ 3.7 billion. At the end of the auction, the total bids presented by investors totalled GH¢2.6 billion. This marks a shortfall of GH¢1.1 billion, representing an undersubscription rate of 30.08%.
From the report of the auction, the 91-day bill accumulated a total of GH¢2 billion, while the 182-day bill also gathered GH¢394 million. The 364 bill also accumulated an amount of GH¢165 million.
An analysis of the report reveals that out of the total GH¢2.59 billion submitted by investors, the government accepted GH¢2.578 billion. This means only GH¢15 million of the total bids submitted by investors were rejected.
The undersubscription of the bills was recorded amid a reduction in the interest rates.
The interest rate of the 91-Day Bill decreased from 10.5048% to 10.4738%, while that of the 182-Day Bill also decreased from 12.3922 to 12.3516%. Moreover, the 364-Day bill also saw a reduction from 12.8994% to 12.8707%.
Meanwhile, the government plans to raise an amount of GH¢5.3 billion in its upcoming auction this week. Will the dip last week continue this week, or will there be a reversal?
Market watchers are closely monitoring the market to see if there will be a rebound.
