Interest rates on Treasury bills edged higher last week as the government raised GH¢4.49 billion, missing its GH¢6.83 billion target by about GH¢2.33 billion, according to Bank of Ghana data. This shortfall represents 33% below the planned amount.
The 91-day bill led with GH¢3.61 billion in bids, accepting GH¢3.60 billion. The 182-day bill saw GH¢617 million in bids with GH¢612 million accepted, while the 364-day bill recorded GH¢282 million bids and accepted GH¢279 million
Yields nudged upward across all maturities: the 91-day bill rose 11 basis points to 10.93%, the 182-day bill climbed 12 basis points to 12.61%, and the 364-day bill increased 6 basis points to 13.01%. Despite higher yields, investor demand remained weak, resulting in another undersubscribed auction.
Analysts link the shortfall to subdued institutional interest, as Treasury bill returns still lag more attractive short-term options like fixed deposits and equities. “Even with rising yields, Treasury bills are not yet pulling significant demand. The government is accepting higher-yield bids to bridge the funding gap,” one analyst noted.
The Treasury plans to return to the market this week aiming to raise GH¢5.68 billion across the 91-, 182-, and 364-day bills. Experts suggest rates may need to rise further to attract investors, though this raises borrowing costs, or that enhanced market confidence could improve participation in upcoming auctions.
Story by: Mercy Addai Turkson #ahotoronline.com