Ghana’s Treasury bill market has recorded its fourth consecutive undersubscription, deepening concerns about weakening investor appetite and tightening liquidity conditions in the domestic market. At the latest auction, the government aimed to raise GH¢7.570 billion, but received bids totaling GH¢5.310 billion, resulting in an undersubscription of GH¢2.260 billion. This represents 29.85% below target. Out of the bids submitted, the government accepted GH¢5.113 billion, leaving a wider shortfall of GH¢2.457 billion, even as it rejected GH¢196.85 million in bids. This is despite failing to meet its borrowing target. Demand Continues to Weaken The persistent undersubscriptions mark a sharp shift from the earlier period of strong demand, suggesting that liquidity in the market is tightening or that investors are increasingly cautious about current yield levels. READ ALSO If US-Iran Stalemate Persists, a Tax Cut on Fuel Prices Will Hurt Govt and Provide Little or No Relief to the Public Solving Accra’s Urban Transport Chaos: The Accra Transport Authority (ATA) The Future of Ghana’s Oil Refinery Amid the Green Energy Transition ‘Craze’: The Outlook for TOR After weeks of declining interest rates, investor participation appears to have weakened, with some market players possibly reallocating funds to alternative investments. Government Still Rejects Bids In a notable development, the government continued to reject part of the bids submitted, even though it fell significantly short of its target. This indicates that authorities remain focused on controlling borrowing costs, choosing not to accept higher-rate bids that could increase debt servicing pressures. Yields Climb Further Interest rates recorded another uptick across all tenors, reinforcing the shift in market conditions: 91-Day bill: increased from 4.8170% to 4.9106% 182-Day bill: rose from 6.7104% to 6.7760% 364-Day bill: climbed from 9.8422% to 9.9788% The rise in yields suggests that the government is gradually adjusting rates upward to attract investors, though demand remains subdued. Breakdown of Bids Investor demand was heavily concentrated at the short end: 91-Day bill: GH¢4.4 billion 182-Day bill: GH¢521.96 million 364-Day bill: GH¢348.94 million The relatively low participation in longer-dated instruments highlights investor preference for shorter maturities amid uncertainty. Finance Minister Dr. Ato Forson Implications for Government For the government, the continued undersubscriptions present growing fiscal challenges. With reduced participation in the T-bill market, authorities may face limited access to domestic financing, pressure to increase interest rates further, and the need to adjust borrowing strategies If the trend persists, the government may be forced to either accept higher borrowing costs or explore alternative funding sources to meet its financing needs. Share this: Share on X (Opens in new window) X Share on Facebook (Opens in new window) Facebook Like this:Like Loading... Related