The government’s treasury bills auction has recorded its seventh consecutive undersubscription, reflecting continued tight liquidity conditions in the banking system and cautious investor sentiment toward sovereign debt.
According to the results of tender 2004 held on April 24, 2026, for government of Ghana securities to be issued on April 27, 2026, investors submitted total bids of GH¢4.48855 billion across the 91-day, 182-day, and 364-day instruments, falling short of the government’s target of GH¢4.475 billion. Of the amount tendered, the Treasury accepted GH¢4.09030 billion, leaving a shortfall of approximately GH¢384.7 million relative to bids submitted and a GH¢577 million gap relative to the target when considering the full target amount.
The undersubscription extends a worrying trend that has seen the government struggle to meet its financing targets through domestic borrowing, potentially putting pressure on the cedi and complicating the government’s cash management operations.
Strong demand for short-term instruments
Demand remained heavily skewed toward short-term instruments, reflecting investor preference for liquidity and safety amid economic uncertainty. The 91-day bill recorded the strongest interest, attracting GH¢2.75623 billion in bids, with GH¢2.71025 billion accepted. The range of bid rates spanned from 4.5000 per cent to 5.3000 per cent, with rates allotted in full between 4.5000 per cent and 4.9997 per cent. The weighted average discount rate settled at 4.8645 per cent, with the corresponding interest rate at 4.9244 per cent.
The 182-day bill also posted firm demand, with GH¢717.64 million tendered and GH¢664.37 million accepted. Bid rates ranged from 6.5000 per cent to 7.5000 per cent, with full allotment between 6.5000 per cent and 6.9498 per cent. The weighted average discount rate came in at 6.7183 per cent, translating to an interest rate of 6.9630 per cent.
Weak appetite for 364-day bill
In contrast, appetite for the 364-day bill weakened considerably. Of the GH¢960.08 million in bids submitted, only GH¢522.48 million was accepted—just over half of the amount tendered. The range of bid rates stretched from 8.5000 per cent to 9.7473 per cent, with full allotment between 8.5000 per cent and 9.3450 per cent. The weighted average discount rate stood at 9.1932 per cent, equating to an interest rate of 10.1239 per cent.
Mixed interest rate movements
Interest rate movements were mixed across the yield curve. The 91-day yield eased marginally, while the 182-day yield edged upward. The 364-day yield remained elevated, reflecting lingering concerns around inflation and the government’s medium-term fiscal trajectory.
The divergence in yields underscores cautious investor sentiment, with preference tilted toward short-term securities where perceived risk is lower. The relatively higher rates on longer-dated instruments suggest that investors are demanding a premium to lock in funds for extended periods.
Higher target for next auction
Looking ahead, the government has set a significantly higher target of GH¢5.009 billion for tender 2005, signalling increased near-term financing requirements. The success of that auction will depend heavily on liquidity conditions in the banking system and investor confidence in the government’s fiscal consolidation efforts.
Auction framework
The Bank of Ghana noted that the government securities wholesale auction is open exclusively to primary dealers, who are obliged to act as market makers in government securities. The investing public interested in purchasing or selling government securities may do so on the secondary market—the Ghana Fixed Income Market—through depository participants, including primary dealers.
Source:
www.graphic.com.gh