The government has, for the first time in more than two months, failed to meet its Treasury bills target, amid relatively weak investor demand at the latest auction.
According to auction results released by the Bank of Ghana (BoG), investors tendered GH¢3.9 billion in bids against a target of approximately GH¢4.1 billion, leaving the auction marginally undersubscribed.
The government, however, accepted only about GH¢1.8 billion of the bids submitted.
The 91-day bill attracted the highest investor interest, accounting for GH¢2.28 billion, or 57.8 percent, of total bids tendered. Despite the strong demand, the government accepted GH¢1.8 billion.
For the 364-day bill, investors submitted approximately GH¢1.2 billion in bids, but the government took up only GH¢110.52 million.
The 182-day bill received GH¢452.79 million in bids, with the government accepting GH¢110.52 million.
The latest auction also saw interest rates decline on the longer-dated instruments, reflecting continued downward movement in Treasury bill yields.
The yield on the 182-day bill fell by 3.0 basis points to 6.48 percent, while the yield on the 364-day bill declined to 9.98 percent from 10.10 percent recorded at the previous auction.
Meanwhile, the yield on the 91-day bill remained unchanged at 4.69 percent.
The outcome marks a shift from the government’s recent Treasury bill auctions, where strong investor participation has generally enabled it to meet or exceed its borrowing targets.
The marginal shortfall at the latest auction comes against a backdrop of declining short-term interest rates, with investors continuing to adjust their expectations as monetary and liquidity conditions evolve.
The lower uptake of the longer-dated bills also suggests relatively cautious demand despite the government’s continued reliance on the domestic market to meet its financing requirements.
Source: businesspostonline
