Last week, investors exhibited a continued decline in their demand for Treasury bills, resulting in another undersubscription recorded by the Treasury.
This situation arose as investors submitted bids totaling GH¢3.9 billion for the 91- to 364-day bills, which represents a 30.45 percent undersubscription relative to the Treasury’s target of GH¢5.68 billion.
Data released by the Bank of Ghana indicates that the 91-day bill led the auction with bids amounting to GH¢3.07 billion, of which GH¢2.97 billion was accepted.
The 182-day bill attracted GH¢613 million, with GH¢608 million accepted, while the 364-day bill received GH¢257 million, of which GH¢254 million was accepted.
Yields experienced a slight increase across the curve. The yield on the 91-day bill rose by 10 basis points to 11.02 percent, up from 10.92 percent the previous week.
The yield on the 182-day bill increased by 5 basis points to 12.66 percent from 12.61 percent, while the 364-day bill’s yield rose by 6 basis points to 13.08 percent from 13.01 percent.
Analysts observe that demand from institutional investors remains low, as T-bill returns continue to fall short compared to alternative investments such as fixed deposits and equities. To address the shortfall in its auctions, the Treasury has been accepting slightly higher-yield bids, which has contributed to the modest increase in rates across the curve.
Looking forward, the Treasury intends to raise GH¢6.42 billion across the three short-term maturities in its upcoming auction.
