Ghana’s Treasury bill market has slipped back into an undersubscription after just two weeks of recovery. This has ended a short-lived rebound that had seen two consecutive oversubscribed auctions.
The latest auction results published by the Bank of Ghana reveal that the government sought to raise GH¢4.486 billion but received bids totaling GH¢4.221 billion. This resulted in an undersubscription of GH¢264.86 million, representing a 5.90% below target.
The government went on to accept only GH¢3.934 billion, leaving a funding shortfall of GH¢551.58 million against its borrowing plan and rejecting about GH¢286.72 million of submitted bids.
The setback marks a return to funding pressure for the fiscal authorities, especially at a time when revenue performance has also shown signs of softness, adding strain to budget execution and short-term cash management.
According to the auction report, investor participation remained relatively cautious, with the 91-day bill attracting GH¢2.5 billion, the 182-day instrument drawing GH¢877.72 million, and the 364-day bill recording GH¢817.12 million. The composition suggests continued preference for short-term paper, though overall demand was not strong enough to meet the government’s financing target.
Despite the weaker demand, interest rates edged slightly lower across all tenors, indicating a mild easing in yield expectations.
The 91-day bill declined from 4.9174% to 4.9143%, the 182-day eased from 7.0411% to 7.0406%, and the 364-day slipped from 10.3857% to 10.3716%. The mixed outcome highlights a fragile balance in the domestic debt market, where improving investor sentiment has not yet fully stabilised.
After two weeks of oversubscription, the latest undersubscription suggests that liquidity conditions remain uneven and highly sensitive to shifting market expectations.
For government, the development complicates fiscal operations. With revenues already under pressure, weaker-than-expected T-bill uptake means greater reliance on tighter cash management, possible spending adjustments, or alternative financing sources to bridge gaps.
The return to undersubscription after a brief rebound underscores the volatility in investor appetite, where confidence is still rebuilding and demand can shift quickly within a few auction cycles.
While the marginal easing in interest rates offers some relief on borrowing costs, the inability to meet funding targets signals that fiscal space remains constrained, keeping both policymakers and markets on alert in the weeks ahead.
