T-Bill Undersubscription Persists as Gov’t Misses Target by GHS 711 Million in Latest Auction
Government continues to face undersubscription challenges in its short-term debt market, missing its latest Treasury bill (T-bill) auction target by approximately GHS 711 million. This marks the third consecutive week of auction shortfalls amid growing competition from higher-yielding Bank of Ghana (BoG) instruments.
According to results published by the Bank of Ghana, the government successfully raised GHS 4.61 billion against a target of GHS 5.32 billion. Market analysts attribute the persistent undersubscription partly to the BoG’s 56-day bills, which currently offer yields around 21% – significantly higher than the returns on T-bills.
Rising Yields Across Tenors
Yields on the short-term securities trended upward, reflecting investor demands for better compensation amid tightening liquidity. The 91-day bill rose to 10.81 percent from 10.67 percent at the previous auction, while the 182-day and 364-day tenors cleared at 12.49 percent and 12.95 percent, respectively, compared to 12.46 percent and 12.87 percent earlier.
Despite the uptick, investors continue to favor alternative instruments with superior yields, putting further pressure on government borrowing costs.
Upcoming Auction and Q4 Borrowing Plans
In its upcoming auction, the government aims to raise GHS 6.83 billion across the 91-, 182-, and 364-day maturities. Market watchers will closely monitor whether investor demand rebounds or the undersubscription trend extends in November.
Meanwhile, the government has outlined plans to raise a gross amount of GHS 75.7 billion from the domestic market between October and December 2025, according to the Bank of Ghana’s latest issuance calendar. The amount comprises GHS 67.52 billion to refinance maturing obligations and GHS 8.18 billion in fresh issuances to meet net financing needs for the fourth quarter.
Per the issuance plan, the government will maintain weekly auctions for its 91-, 182-, and 364-day Treasury bills, with settlements occurring one business day after each sale. Additionally, selected Domestic Debt Exchange Programme (DDEP) bonds may be reopened, depending on market conditions, to enhance liquidity and support budget execution.
