Government Misses Treasury Bill Auction Target for Second Time, Secures GHS 6.41 Billion
The Government of Ghana has fallen short of its Treasury bill (T-bill) auction target for November 22, 2024, raising GHS 6.41 billion against a target of GHS 6.89 billion.
This marks a shortfall of GHS 485 million and represents the second undersubscription in seven weeks, following a previous five-week streak of oversubscriptions.
Demand Trends in T-bill Auction
Despite the undersubscription, investor demand remained strong across all tenors.
The 91-day bill recorded the highest participation, with bids amounting to GHS 4.24 billion.
The 182-day and 364-day bills also attracted significant interest, garnering GHS 843 million and GHS 1.32 billion, respectively.
Slight Yield Increases Observed
The auction saw an uptick in yields across all tenors as investors sought higher returns amid Ghana’s fiscal challenges:
- 91-day bill: Yielded 27.19%, an increase of 0.23 percentage points from the previous auction.
- 182-day bill: Yielded 27.98%, up by 0.20 percentage points.
- 364-day bill: Yielded 29.82%, marking a sharper rise of 0.61 percentage points.
Government’s Reliance on Domestic Debt Markets
The government continues to depend heavily on domestic debt markets to address its financing needs, particularly through short-term debt instruments like T-bills.
For the next auction, the government aims to raise GHS 6.09 billion, emphasizing the importance of sustaining investor confidence in its debt securities.
Balancing Investor Confidence and Fiscal Pressures
While the steady interest in T-bills underscores investor confidence, the undersubscription reflects the challenges of achieving ambitious borrowing targets amid rising yields and Ghana’s growing domestic debt obligations.
The performance of upcoming auctions will be critical as the government navigates a difficult fiscal environment, balancing the need for financing with market conditions.
