Last week, Treasury bills experienced undersubscription, with the government missing its target by GH¢2.03 billion. The Treasury accepted bids amounting to GH¢6.24 billion against a goal of GH¢8.28 billion, indicating a shortfall of 24.59 percent.
This situation followed a week after the market noted its first oversubscription.
As per the latest data from the Bank of Ghana, investors submitted GH¢6.50 billion across the 91-day, 182-day, and 364-day maturities, of which GH¢6.24 billion was accepted.
A detailed analysis of the bids revealed that GH¢5.25 billion out of GH¢5.49 billion was accepted for the 91-day bill. For the 182-day instrument, GH¢784 million was accepted from the GH¢789 million submitted, while the 364-day bill saw GH¢209 million accepted out of GH¢214 million tendered.
Analysts suggest that the ongoing weak investor interest in these bills contributed to the undersubscription observed in last week’s auction, with the substantial issuance target, influenced by a significant upcoming maturity profile, further limiting the Treasury’s capacity to meet its target.
In the meantime, yields on the short end of the curve have slightly increased, averaging between 10 and 12 percent. The yield on the 91-day bill rose by 11 basis points to 10.53 percent from a previous 10.42 percent. The 182-day yield increased by 3 basis points to 12.44 percent, while the 364-day yield decreased by 2 basis points to 12.95 percent.
Analysts observe that the ongoing compression of the 364-day yield illustrates the Treasury’s intentional strategy to reduce borrowing costs as part of its comprehensive debt management approach.
Looking forward, the government aims to raise GH¢3.01 billion at the upcoming auction.
