T-BILL AUCTION: GOVERNMENT MISSES TARGET BY GHC1.59BN AS YIELDS DECLINE

In a recent Treasury bill auction, the Ghanaian government failed to meet its fundraising goal, falling short by approximately GH¢1.59 billion as interest rates declined. The government aimed to raise GH¢5.644 billion but secured only GH¢4.08 billion, marking the second consecutive week of undersubscription.

Investor demand was highest for the 91-day bill, which attracted bids totaling GH¢3.506 billion, out of which GH¢3.029 billion was accepted. The 182-day bill received GH¢582.8 million in bids—all accepted—while the 364-day bill saw bids of GH¢619.47 million, with GH¢500.5 million accepted.

Interest rates continued their downward trend. The 91-day bill yield dropped by 14 basis points to 15.71%, while the 182-day bill saw its rate fall to 16.73% from 16.92%. The 364-day bill’s yield remained stable at 18.84%.

Market analysts attribute the shortfall to a more cautious borrowing approach by the government, amid efforts to control inflation and stabilize the local currency. These developments come in the wake of recent Bank of Ghana actions and a staff-level agreement with the IMF, which have helped improve investor sentiment.

Despite the funding gap, demand for short-term government securities remains relatively strong, indicating sustained investor confidence. However, experts suggest the government may need to recalibrate its borrowing strategies to better match market dynamics and fiscal objectives.