T-Bill auction falls 30 per cent below target despite yield uptick

Investors last week continued to show reduced momentum in their demand for Treasury bills, as the Treasury recorded another undersubscription.

This comes as investors tendered GH¢3.9 billion across the 91- to 364-day bills, reflecting a 30.45 percent undersubscription compared to the Treasury’s target of GH¢5.68 billion.

According to data published by the Bank of Ghana, the 91-day bill led the auction with GH¢3.07 billion in bids, of which GH¢2.97 billion was accepted.

The 182-day bill attracted GH¢613 million, with GH¢608 million accepted, while the 364-day bill drew GH¢257 million, of which GH¢254 million was accepted.

Yields rose slightly across the curve. The 91-day bill increased by 10 basis points to 11.02 percent from 10.92 percent the previous week.

The 182-day bill inched up by 5 basis points to 12.66 percent from 12.61 percent, while the 364-day bill went up by 6 basis points to 13.08 percent from 13.01 percent.

Analysts note that demand from institutional investors remains subdued, as T-bill returns continue to lag behind alternative assets like fixed deposits and equities. In an effort to bridge the shortfall in its auctions, the Treasury has been taking on slightly higher-yield bids—contributing to the modest rise in rates across the curve.

Looking ahead, the Treasury plans to raise GH¢6.42 billion across the three short-term maturities in its next auction.