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Ghana’s treasury market slipped back into undersubscription last week, with the government falling short of its target by nearly a quarter, just a week after recording its first oversubscription in months.
According to the Bank of Ghana’s auction results, the Treasury sought to raise GH¢8.28 billion across the 91-day, 182-day, and 364-day maturities but managed to secure GH¢6.24 billion, representing a shortfall of GH¢2.03 billion or 24.59 per cent.
Investor bids totalled GH¢6.50 billion, out of which GH¢6.24 billion was accepted. The 91-day bill continued to attract the lion’s share of demand, with GH¢5.25 billion accepted out of GH¢5.49 billion tendered. The 182-day instrument saw GH¢784 million taken from GH¢789 million submitted, while the 364-day bill recorded GH¢209 million accepted out of GH¢214 million offered.
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Market analysts attributed the undersubscription to persistent weak investor appetite, combined with a large issuance target driven by a heavy upcoming maturity profile. The Treasury’s inability to fully meet its target, they added, underscores the ongoing challenges in balancing debt refinancing needs with investor demand.
On the pricing front, yields on the shorter end of the curve edged upward. The 91-day yield rose 11 basis points to 10.53 per cent, from 10.42 per cent the previous week. The 182-day bill ticked up slightly by 3 basis points to 12.44 per cent. Conversely, the 364-day yield slipped 2 basis points to 12.95 per cent.
Analysts note that the downward adjustment in the 364-day yield is consistent with the Treasury’s strategy of gradually lowering borrowing costs as part of a broader debt management plan.
With about GH¢3.01 billion targeted at the next auction, market watchers say the government’s success will depend on investor confidence in its fiscal consolidation efforts and its ability to manage maturities without exerting undue pressure on yields.
