Ghana’s Treasury bill market has recorded its sixth consecutive undersubscription, although the latest auction suggests demand is beginning to stabilise after weeks of persistent shortfalls.
At last week’s auction, the government targeted GH¢4.475 billion but received bids totaling GH¢4.434 billion, resulting in a marginal undersubscription of GH¢41.05 million, representing just 0.92% below target.
Despite missing its target, the government accepted GH¢3.897 billion in bids, reflecting a continued effort to balance borrowing needs with cost control, even in a tight market environment.
Demand Shows Signs of Recovery
The narrow gap between the target and bids signals that investor appetite may be gradually returning, following several weeks of weak participation.
This comes after a sustained period of declining yields, which had dampened interest in Treasury bills and contributed to repeated undersubscriptions.
Yield Movements Mixed Across Tenors
Interest rates showed mixed movements, pointing to a market still adjusting:
91-Day bill: declined from 4.9480% to 4.9244%
182-Day bill: increased from 6.9099% to 6.9630%
364-Day bill: edged down from 10.1283% to 10.1239%
The divergence suggests that while some investors are responding to slightly higher medium-term rates, overall sentiment remains cautious.
Breakdown of Demand
Investor interest remained concentrated in short-term instruments:
91-Day bill: GH¢2.8 billion
182-Day bill: GH¢717.64 million
364-Day bill: GH¢960.08 million
The relatively stronger demand across all tenors compared to previous auctions reinforces signs of gradual market stabilisation.
Implications for Government
For the government, the sixth straight undersubscription still reflects a constrained financing environment, even if conditions are improving.
A Market at a Turning Point
While undersubscription persists, the latest auction points to a possible turning point, with demand nearly matching the government’s target.
The signal from the market is evolving as investor confidence is slowly returning, but it remains sensitive to interest rate movements and broader liquidity conditions.
For now, the government must navigate a more cautious market, one where funding is no longer automatic but is gradually becoming more accessible again.
