Investor interest in short-term securities issued by the Government of Ghana remained subdued during the final auction of April, as total bids fell short of the issuance target by 10.4 percent, highlighting ongoing weakness in the primary market.
The results from the most recent auction indicate that a total of GH¢4.49 billion was submitted across the 91-day, 182-day, and 364-day Treasury bills, with the Bank of Ghana accepting GH¢4.44 billion.
With a target of GH¢5.01 billion, the auction experienced a shortfall of GH¢571.21 million, emphasizing weak participation in comparison to the government’s financing expectations.
At the shorter end of the yield curve, the 91-day bill attracted bids totaling GH¢1.89 billion, all of which were accepted, indicating a sustained investor preference for shorter-dated instruments. Likewise, the 182-day bill received tenders amounting to GH¢764.25 million, with full acceptance, demonstrating stable demand in the medium-term segment.
Conversely, demand weakened at the longer end. The 364-day bill garnered bids of GH¢1.83 billion, of which GH¢1.78 billion was accepted, suggesting some level of bid rejection and a more cautious approach among investors regarding longer maturities.
Yields increased across the curve. The rate for the 91-day bill remained unchanged at 4.92 percent, while the 182-day bill saw a slight increase of 1 basis point to 6.96 percent. The yield on the 364-day bill rose more significantly by 7 basis points to 10.19 percent, up from 10.12 percent in the previous auction.
The ongoing trend of undersubscription indicates persistent liquidity constraints, a preference among investors for higher yields, and continued caution towards longer-dated securities.
Looking forward, the government seems to be revising its borrowing strategy, reducing its target to GH¢4.34 billion for the upcoming auction.
