For the third consecutive week, Ghana’s Treasury bill auction has failed to meet its target.
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The government aimed to raise GHS 6.68 billion but secured only GHS 2.76 billion, falling short by GHS 3.92 billion. This persistent shortfall has raised concerns about investor appetite for short-term government securities.
Data from the Bank of Ghana shows a sharp decline in demand, with the auction registering an undersubscription rate of 58.67 percent. This starkly contrasts with the previous week, when all bids were fully accepted.
The 91-day bill attracted GHS 4.36 billion in bids, yet the government accepted just GHS 2.09 billion. Similarly, for the 182-day bill, GHS 731 million was tendered, with only GHS 513 million approved. Meanwhile, the 364-day bill received GHS 260 million in bids, of which GHS 154 million was accepted.
This weak response has pushed yields further down. The 91-day rate fell by five basis points to 15.11 percent, while the 182-day rate slipped by two points to 15.68 percent. The 364-day bill also saw a modest drop of one basis point to 16.79 percent.
Analysts say the continued decline in demand signals growing caution among investors. Many believe that rising fiscal risks, tightening liquidity, and more attractive investment alternatives are prompting this hesitancy.
In addition, the lower yields erode potential returns, making Treasury bills less appealing, especially for investors looking to hedge against inflation or currency depreciation.
Without a shift in sentiment or improved market incentives, the government may face increasing difficulty in raising funds through short-term debt instruments.
