Treasury bill auction misses target as investor demand remains weak

Investor appetite for Treasury bills remained weak last week, with the government's latest auction falling short of its fundraising target by GH¢1.07 billion despite accepting all bids submitted.

According to auction results released by the Bank of Ghana, investors tendered a total of GH¢4.21 billion across the 91-day, 182-day and 364-day Treasury bill instruments. The government accepted the full amount, raising GH¢4.21 billion.

However, the amount raised fell below the government's target of GH¢5.27 billion, resulting in a shortfall of GH¢1.07 billion and an under-subscription rate of 20.2%.

The 91-day Treasury bill attracted the highest investor interest, accounting for more than half of total bids. Investors submitted GH¢2.26 billion for the short-term instrument, all of which was accepted.

The 182-day bill recorded bids worth GH¢802.87 million, while the 364-day instrument attracted GH¢1.15 billion. The government accepted every bid received across all three tenors, indicating there were no rejections at the auction.

Meanwhile, yields continued their upward trend across the yield curve. The rate on the 91-day Treasury bill rose by 26 basis points to 5.30%, up from 5.04% in the previous auction.

The 182-day bill edged up by 5 basis points to 7.13% from 7.08%, while the yield on the 364-day bill increased by 39 basis points to 11.36% from 10.97%.

The auction outcome points to a slowdown in investor demand for government securities, even as the government accepted all bids presented.

For the next auction, the government is seeking to raise GH¢4.60 billion through the issuance of Treasury bills.