Treasury Bill Auction Falls 35% Short of Target as Yields Keep Declining
Investors last week continued to ease their demand for treasury bills, with the Treasury recording an undersubscription in its primary auction.
Total bids amounted to GH¢3.0 billion, of which GH¢2.73 billion was accepted, falling 35.6 percent short of the GH¢4.24 billion target.
The shortfall comes after a stronger performance in the August 8 auction, where the Treasury accepted GH¢6.68 billion out of GH¢6.89 billion tendered.
Analysts attribute the weaker demand largely to a shift of funds into other attractive instruments such as fixed deposits and repos.
A breakdown of the auction shows that GH¢2.02 billion out of GH¢2.05 billion in bids for the 91-day bill was accepted. For the 182-day bill, GH¢537 million was taken from GH¢678 million in bids, while the 364-day bill saw GH¢167 million accepted out of GH¢272 million tendered.
Yields continued their downward trajectory, ranging between 10 and 13 percent. The 91-day yield slipped by 7 basis points to 10.13 percent, the 182-day by 2 basis points to 12.23 percent, and the 364-day by 2 basis points to 13.08 percent.
Looking ahead, the government aims to raise GHS 6.42 billion at the next auction. This underscores the government’s sustained dependence on short-term domestic borrowing to refinance maturing debt and support liquidity management.
