Treasury witnesses GHS 750 million shortfall in T-Bill issuance despite unchanged yields, robust investor interest
On Friday, the government secured GHS 4.11 billion through its latest issuance of Treasury Bills, falling short of the targeted GHS 4.86 billion by GHS 750 million.
The auction results, released by the Bank of Ghana, indicated a 15.4% undersubscription rate, highlighting a notable shortfall despite steady yields across the board.
The breakdown of accepted bids showed a significant preference for the 91-day Bill, which attracted the highest level of subscriptions, amounting to GHS 3 billion. The 182-day Bill followed with GHS 795 million in accepted bids, while the 364-day Bill saw GHS 269 million.
The yields for these tenors remained unchanged from the previous auction, with the 91-day Bill yielding 25.09%, the 182-day Bill at 26.94%, and the 364-day Bill maintaining a yield of 27.94%.
The undersubscription comes amidst a backdrop of unchanged yields, suggesting that while investor interest remains robust, it fell short of government expectations. This scenario underscores the complexities of managing short-term financing needs in a challenging economic environment.
Looking ahead, the government has set a more modest target for its next auction, aiming to raise GHS 2.71 billion through the issuance of the 91-day, 182-day, and 364-day Bills. This adjusted target reflects a strategic recalibration in response to the current market dynamics and investor sentiment.
The steady yields across all tenors indicate a level of market stability, yet the undersubscription points to underlying challenges in achieving the desired funding levels.
As the government navigates these financial waters, its reliance on T-Bills remains a crucial tool in its broader fiscal strategy, balancing immediate liquidity needs with long-term economic goals.
In conclusion, the recent T-Bill auction results highlight a mixed financial landscape where investor confidence remains firm, but market participation did not meet the government’s ambitious targets.
The upcoming auction will be a critical indicator of whether these trends persist and how the government adjusts its approach to meet its fiscal objectives.
