Weak Investor Demand Drives GHS 2.26 Billion Shortfall in Latest T-Bill Auction
Government fell short of its Treasury bill auction target on November 29, 2024, raising GHS 3.83 billion against a target of GHS 6.09 billion.
The auction marked a GHS 2.26 billion shortfall, the third consecutive undersubscription in eight weeks, after a prior streak of five consecutive oversubscriptions.
The undersubscription reflects waning investor demand despite rising yields across all three tenors.
The 91-day bill accounted for the bulk of bids, securing GHS 2.94 billion, while the 182-day and 364-day bills garnered GHS 669 million and GHS 216 million respectively.
Investors sought higher returns amid Ghana’s fiscal pressures, driving an uptick in yields:
- 91-day bill: Yielded 27.36%, up 17 basis points from the previous auction.
- 182-day bill: Yielded 28.09%, an 11 basis point increase.
- 364-day bill: Yielded 29.87%, up 5 basis points.
The government has increasingly leaned on domestic markets to finance its growing fiscal deficit, relying on short-term debt instruments to meet its obligations.
However, the latest undersubscription signals the difficulties of sustaining ambitious borrowing plans as investor appetite softens.
For its next auction, the government is targeting GHS 6.49 billion, a critical test for its ability to navigate mounting domestic debt pressures and maintain market confidence.
The results of upcoming auctions will be pivotal as Ghana seeks to balance its financing requirements with challenging market conditions.
