- The government missed its Treasury bill target by GH¢1.5 billion
- The 91-day bill accepted GH¢3 billion, while the 182-day bill fully accepted GH¢582.87 million
- Interest rates on Treasury bills remain between 15% and 18%
The government has again fallen short of its Treasury bill target, missing it by GH¢1.5 billion.
Recent data from the Bank of Ghana (BoG) shows that the government had aimed to raise GH¢5.64 billion from short-term instruments but only received GH¢4.11 billion in bids, resulting in a 27.1% undersubscription. Authorities also rejected GH¢595 million in bids.
For the 91-day Treasury bill, GH¢3.5 billion was offered, with GH¢3 billion accepted. The 182-day bill saw full acceptance of GH¢582.87 million in bids, while the 364-day bill had GH¢619 million tendered, with only GH¢500 million accepted.
Interest rates on Treasury bills remain between 15% and 18%, with the 91-day bill dropping slightly to 15.71%, the 182-day bill falling to 16.73%, and the 364-day bill staying at 18.85%. This follows the Bank of Ghana’s decision to raise the policy rate from 27% to 28%.
The ongoing undersubscription raises concerns about market appetite and liquidity conditions.
Market analysts suggest the undersubscription is due to the Treasury’s balance of rejecting high-rate bids while facing fewer investor offers. They anticipate tighter money market liquidity, with the BoG’s upcoming 273-day bill expected to absorb more institutional bids, potentially increasing pressure on the Treasury if liquidity buffers diminish.
Analysts believe the MPC’s rate hike and tightening liquidity will likely push short-term interest rates higher in the coming months, depending on the Treasury’s buffers and the timing of long-dated bond market reopenings. Both nominal and effective interest rates may rise, possibly tightening credit growth.
In the next auction, the Treasury plans to raise GH¢4.39 billion.
