Government Misses Treasury Bills Target as Investor Demand Weakens

The government fell short of its treasury bills target in its latest auction, just a week after recording an oversubscription, as investor demand weakened.

According to results released by the Bank of Ghana, the government received total bids worth GHS4.206 billion against a target of GHS5.274 billion, resulting in an undersubscription of about 20%. Despite the shortfall, all bids submitted by investors were accepted.

The 91-day treasury bill remained the most attractive instrument to investors, accounting for more than half of the total bids received. Investors tendered GHS2.25 billion for the short-term security, representing 53.6% of total subscriptions.

The 182-day bill attracted bids worth GHS802.87 million, while the 364-day bill recorded subscriptions of GHS1.146 billion.

Meanwhile, treasury bill yields continued their upward trend across all tenors, indicating rising borrowing costs for the government.

The yield on the 91-day bill increased by 26 basis points to 5.30%. The 182-day bill also edged up to 7.13% from 7.08%, while the 364-day bill rose by 39 basis points to 11.36%.

The latest auction outcome suggests a moderation in investor appetite for government securities after strong demand in the previous week, although treasury bills continue to attract significant interest from investors seeking relatively safe investment options.