Ghana’s Treasury bill market has recorded a seventh consecutive undersubscription, reinforcing signs of a tighter liquidity environment even as investor demand shows pockets of resilience.
At the latest auction, the government fell short of its GH¢5.009 billion target after attracting bids of GH¢4.488 billion, leaving an undersubscription of GH¢520.64 million, representing 10.39% below target.
Despite this, authorities went ahead to accept GH¢4.438 billion, taking in almost the full value of bids submitted in a clear signal of the need to secure funding in a more constrained market.
What stands out in this auction is the shift in government behaviour. Unlike previous weeks where bids were rejected to control borrowing costs, the near-total acceptance this time reflects a more pragmatic stance, where meeting immediate financing needs appears to be taking priority over strict rate discipline.
Investor participation remained fairly balanced across the curve, with the short-term 91-day bill attracting GH¢1.9 billion, while the 182-day and 364-day instruments drew GH¢764.25 million and GH¢1.8 billion, respectively.
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This distribution suggests that while liquidity is not as abundant as before, investors are still actively positioning across different maturities.
Interest rates, however, painted a mixed picture. The yield on the 91-day bill edged down slightly from 4.9244% to 4.9233%, indicating some easing at the short end.
In contrast, the 182-day rate ticked up from 6.9630% to 6.9715%, while the 364-day bill rose more noticeably from 10.1239% to 10.1968%, pointing to growing pressure at the longer end of the curve.
For the government, the implications are becoming clearer with each successive auction. The persistence of undersubscriptions means domestic borrowing is no longer as effortless as it once was, and the room to be selective is narrowing. Accepting almost all bids, even below target, suggests that fiscal authorities are now navigating a more delicate balance between cost and access.
If this trend continues, it could gradually push borrowing costs higher, especially at the longer end, while also forcing the government to rethink how it manages its short-term financing needs.
The market, for its part, appears to be adjusting to a new phase where liquidity is thinner, and investors are more deliberate in their allocations.
