Waning Investor Confidence Causes GH¢1.13bn Shortfall in T-bill Auction

Investor demand for Treasury bills weakened significantly last week, leaving the government short of its fundraising target by over GH¢1.13 billion.

Data from the Bank of Ghana shows that the Treasury accepted GH¢2.57 billion in bids, well below its GH¢3.71 billion target — representing a shortfall of about 30.5%.

The bulk of subscriptions came from the 91-day bill, which remained the most attractive to investors. Out of GH¢2.03 billion tendered, nearly 99% was accepted. The 182-day bill recorded GH¢394 million in bids, with GH¢389 million accepted, while the 364-day note saw GH¢165 million accepted from GH¢170 million tendered.

Market watchers say the lower participation reflects waning investor appetite for short-term government securities, as more investors diversify into instruments with stronger yields and less inflation risk.

Meanwhile, yields saw marginal declines across the curve. The 91-day bill dropped to 10.47% from 10.50%, the 182-day bill slipped to 12.35% from 12.39%, and the 364-day bill eased to 12.87% from 12.89% the previous week.

Despite the under-subscription, government is pressing ahead with plans to raise more funds in the coming week, setting a higher target of GH¢5.26 billion in its next T-bill auction.

Analysts caution that the government’s ability to consistently raise its targets will depend on restoring investor confidence and managing competing pressures in the domestic debt market.