Ghana records seventh straight treasury bill undersubscription amid tight liquidity
The government’s treasury bills auction has suffered its seventh consecutive undersubscription, underscoring persistent liquidity constraints in the banking sector and cautious investor sentiment toward government securities.
Per the results of Tender 2004 held on April 24, 2026, for securities to be issued on April 27, 2026, investors submitted bids totaling GH¢4.48855 billion across the 91-day, 182-day, and 364-day instruments. This fell short of the government’s target of GH¢4.475 billion, with the Treasury ultimately accepting GH¢4.09030 billion. This left a shortfall of about GH¢384.7 million relative to total bids, and a wider gap when measured against overall financing expectations.
The continued undersubscription highlights growing difficulties in meeting domestic borrowing targets, a trend that could exert pressure on the cedi and complicate government cash flow management.
Strong demand for short-term securities
Investor interest remained concentrated in short-term instruments, reflecting a preference for liquidity and lower risk amid economic uncertainty. The 91-day bill attracted the highest demand, with bids totalling GH¢2.75623 billion, of which GH¢2.71025 billion was accepted. Bid rates ranged between 4.5000 per cent and 5.3000 per cent, with full allotments between 4.5000 per cent and 4.9997 per cent. The weighted average discount rate settled at 4.8645 per cent, translating to an interest rate of 4.9244 per cent.
The 182-day bill also recorded steady demand, attracting GH¢717.64 million in bids, with GH¢664.37 million accepted. Rates ranged from 6.5000 per cent to 7.5000 per cent, with full allotment between 6.5000 per cent and 6.9498 per cent. The weighted average discount rate stood at 6.7183 per cent, corresponding to an interest rate of 6.9630 per cent.
Weak demand for 364-day instrument
In contrast, the 364-day bill saw weaker appetite. Out of GH¢960.08 million in bids submitted, only GH¢522.48 million was accepted. Bid rates ranged from 8.5000 per cent to 9.7473 per cent, with full allotment between 8.5000 per cent and 9.3450 per cent. The weighted average discount rate was 9.1932 per cent, translating into an interest rate of 10.1239 per cent.
Mixed yield movements across maturities
Yield movements were mixed across the curve, with the 91-day rate easing slightly while the 182-day yield edged higher. The 364-day yield remained elevated, reflecting investor concerns about inflation and medium-term fiscal risks.
The spread between maturities indicates continued caution, with investors favouring short-term papers and demanding higher premiums for longer tenors.
Higher borrowing target ahead
The government has set a higher target of GH¢5.009 billion for the next auction (Tender 2005), signalling increased short-term financing needs. Market performance in the upcoming auction is expected to hinge on liquidity conditions and investor confidence in ongoing fiscal consolidation efforts.
Auction framework
The Bank of Ghana explained that the treasury bills wholesale auction is open only to primary dealers, who serve as market makers in government securities. Retail investors may access or trade these instruments through the Ghana Fixed Income Market via licensed depository participants, including primary dealers.