T-Bill auction falls short as gov’t misses target by GH¢2.03bn

Treasury bills were undersubscribed last week, with the government falling short of its target by GH¢2.03 billion. The Treasury accepted bids totalling GH¢6.24 billion against a target of GH¢8.28 billion, representing a shortfall of 24.59 per cent.

This follows just a week after the market recorded its first oversubscription.

According to the latest Bank of Ghana data, investors tendered GH¢6.50 billion across the 91-day, 182-day, and 364-day maturities, of which GH¢6.24 billion was accepted.

A breakdown of the bids showed GH¢5.25 billion out of GH¢5.49 billion was accepted on the 91-day bill. For the 182-day instrument, GH¢784 million was taken from the GH¢789 million submitted, while the 364-day bill saw GH¢209 million accepted out of GH¢214 million tendered.

Analysts believe persistent weak investor appetite for these bills underpinned the undersubscription in last week’s auction, with the sizeable issuance target, driven by a high upcoming maturity profile, further constraining the Treasury’s ability to achieve its target.

Meanwhile, yields on the short end of the curve edged up slightly, averaging between 10 and 12 per cent. The 91-day yield rose by 11 basis points to 10.53 per cent from 10.42 per cent previously. The 182-day yield inched up 3 basis points to 12.44 per cent, while the 364-day yield slipped 2 basis points to 12.95 per cent.

Analysts note that the continued compression of the 364-day yield reflects the Treasury’s deliberate effort to lower borrowing costs as part of its broader debt management strategy.

Looking ahead, the government is targeting GH¢3.01 billion at the next auction.