Interest rates on Treasury bills inched up again last week as the government raised GH¢4.49 billion, falling short of its GH¢6.83 billion target by about GH¢2.33 billion.
According to data from the Bank of Ghana, the auction results show this represents a short fall of 33%.
The 91-day bill dominated the sale with GH¢3.61 billion in bids, of which GH¢3.60 billion was accepted. The 182-day bill followed with GH¢617 million in bids and GH¢612 million accepted, while the 364-day bill recorded GH¢282 million in bids, with GH¢279 million accepted.
Yields Edge Higher Across All Tenors
Interest rates continued to inch upward across the curve. The 91-day bill rose by 11 basis points to 10.93%, the 182-day bill climbed 12 basis points to 12.61%, and the 364-day bill increased slightly by 6 basis points to 13.01%.
Despite the uptick in yields, investor participation remained weak, marking another undersubscribed auction for the Treasury.
Weak Institutional Demand Persists
Analysts attribute the shortfall to muted institutional investor appetite, as returns on Treasury bills remain less competitive compared to other short-term investments like fixed deposits and equities.
“Even with rising yields, Treasury bills are still not attractive enough to pull significant demand. The government has been accepting higher-yield bids to close the funding gap,” one analyst explained.
Next Auction Target
The Treasury is expected to return to the market this week with plans to raise GH¢5.68 billion across the 91-, 182-, and 364-day maturities.
Analysts say the government may need to allow rates to rise further to attract more investors — though this could increase borrowing costs — or rely on improved market confidence to boost participation in upcoming auctions.