Gov’t Cuts Target for Upcoming Auction After Undersubscription, 387bps Decline in Yields
The Treasury bill market recorded a 16.29% undersubscription last week, as total bids of GH¢5.29 billion fell short of the Government’s target of GH¢6.32 billion.
The acceptance rate, however, remained high at 89.36%, according to market data from SIC Brokerage.
The 91-day bill attracted the most interest, with GH¢2.99 billion tendered and fully accepted, representing 63% of total funds raised.
The 182-day and 364-day tenors attracted GH¢869.04 million and GH¢1.44 billion respectively, though not all bids were accepted as the Government took up GH¢4.73 billion in total.
Yields declined sharply across the curve. The 91-day bill fell to 15.23%, down 57 basis points from the previous week. The 182-day bill saw the steepest decline, dropping by 162bps to 15.77%. The 364-day bill yield also dropped by 168bps to settle at 16.96% – resulting in a cumulative yield decline of 387 basis points.
The sharp moderation in yields reflects sustained investor appetite for short-term government securities despite the undersubscription, likely influenced by improving inflation expectations and easing liquidity constraints.
The next auction, scheduled for May 9, targets GH¢5.39 billion in the 91-, 182-, and 364-day bills auction, which is some 14.8% below the previous auction.
