By: Benjamin Nii Nai Anyetei
Investor demand for treasury bills weakened last week, leaving the government unable to meet its GH¢4.24 billion target in the latest primary auction.
Total bids amounted to GH¢3.01 billion, of which GH¢2.73 billion was accepted—representing a 35.6 percent shortfall. The undersubscription highlights rising competition for funds, as investors increasingly shift to alternative placements such as fixed deposits and repos.
Market watchers say the development underscores the delicate balance facing the Treasury: maintaining attractive yields to sustain investor confidence while reducing borrowing costs in line with economic policy.
Yields on all maturities continued to slide, with the benchmark 91-day bill dropping to 10.13 percent, the 182-day to 12.23 percent, and the 364-day to 13.08 percent. The downward trend, analysts note, reflects both easing inflation expectations and the government’s strategy to lower domestic debt servicing costs.
Despite the weaker auction, government remains heavily dependent on short-term domestic borrowing. It has set a higher target of GH¢6.42 billion for the next auction, aimed at refinancing maturing securities and supporting liquidity needs.
The outcome, however, suggests that authorities may need to strike a careful balance between lowering rates and sustaining investor participation if borrowing targets are to be consistently met.
