The Treasury market recorded a slight pullback last week, as the Treasury fell short of its target by approximately GH¢139 million, marking the first undersubscription in 15 consecutive weeks.

Data released by the Bank of Ghana show that total bids for the 91-day, 182-day, and 364-day Treasury bills reached GH¢8.73 billion, out of which GH¢7.9 billion was accepted.

The outcome represents an undersubscription rate of about 7.45 percent, breaking a prolonged period of strong oversubscriptions.

The 91-day Treasury bill continued to attract the strongest demand, with bids amounting to GH¢6.15 billion, of which GH¢5.88 billion was accepted.

For the 182-day bill, investors tendered GH¢2.06 billion, with the government accepting GH¢1.63 billion.

Meanwhile, the 364-day bill recorded bids of GH¢529.46 million, with GH¢480.46 million accepted.

The softer demand for the instruments occurred against a backdrop of declining yields across most tenors, suggesting a moderation in investor appetite for government securities.

The interest rate on the 91-day Treasury bill fell 11 basis points to 4.71 percent, down from 4.82 percent in the previous auction.

The 182-day yield declined by 2 basis points to 6.28 percent from 6.30 percent while the 364-day bill edged up by 6 basis points to 9.40 percent.

Analysts believe the previously strong liquidity conditions are beginning to moderate, while declining yields are reducing the relative attractiveness of Treasury bills.

At the same time, improving price discovery and strong fundamentals of some stocks in the equities market appear to be drawing some investor interest away from short-term government instruments.

Looking ahead, the government has set a target of GH¢5 billion for its next Treasury bill auction.