Another undersubscription has been recorded on the T-Bill market, making it the second consecutive undersubscription in a row for the government, deepening the uncertainty of investor confidence in the short-term bills.
The government, last week, missed its T-Bill borrowing target, although marginally by GH¢ 169.64 million. This comes after another undersubscription in the previous auction, in which the government missed its target by a whopping GH¢ 1.03 billion.
Given the fluctuation on the market, it was expected that there would be a rebound in the latest auction. However, the undersubscription streak continued.
The latest auction results released by the Bank of Ghana report that the government planned to borrow an amount of GH¢ 5.4 billion. At the end of the auction, total bids tendered by investors amounted to GH¢ 5.2 billion.
For the first time in many weeks, all bids tendered by investors were accepted with no rejection. However, there was a shortfall of GH¢ 169.64 million, representing 3.1% of the planned target.
The majority of bills came from the 91-Day Bill, which took a share of 73%, followed by the 182-Day bill, representing 14.3%, while the 364-Day bills also took a share of 11.7% of the total bids accepted.
As hoped for by the government, the downward trend of the interest rates on the bids continued last week.
From the auction report, the yield on the 91-day bill declined from 15.2333% to 15.1610%. The 182-day bill also declined from 15.7783% to 15.7049%, while the rate on the 364-day also fell to 16.8018% from 16.9591%.
In the meantime, the government plans to raise GH¢ 6.7 billion in its upcoming auction. Market watchers are closely monitoring the market to see if there will be a rebound or the back-to-back nosedive will be replicated in this week’s auction.
