Ghana Treasury Bills Undersubscribed by 5.9% as Demand Slows
Ghana’s treasury bill market has recorded a slowdown in investor demand, with the latest auction falling short of its target by 5.9%, according to data released by the Bank of Ghana.
Auction misses target
The government sought to raise approximately GH¢4.48 billion through the issuance of short-term securities but received bids totalling just over GH¢4.21 billion. Out of this amount, about GH¢3.9 billion was accepted.
The undersubscription reflects a moderation in investor appetite, coming after periods earlier in 2026 when treasury bill auctions were frequently oversubscribed.
Breakdown of demand
Despite the overall shortfall, the 91-day treasury bill remained the most attractive instrument, accounting for nearly 60% of total bids with about GH¢2.52 billion tendered.
- 91-day bill: GH¢2.52 billion in bids, GH¢2.51 billion accepted
- 182-day bill: GH¢877.7 million in bids, about GH¢723 million accepted
- 364-day bill: GH¢817.1 million in bids, about GH¢699 million accepted
Analysts note that investor preference continues to tilt toward short-term securities, reflecting caution about locking funds into longer maturities.
Interest rates decline
The latest auction also saw marginal declines in yields across the curve, suggesting easing borrowing costs for the government:
- 91-day yield fell to 4.91%
- 182-day yield held at 7.04%
- 364-day yield declined to 10.37%
Why demand is weakening
Market observers link the softer demand to several factors:
- Falling yields: Returns on treasury bills have dropped sharply in recent months, reducing their attractiveness to investors.
- Portfolio shifts: Investors are becoming more selective, with some exploring alternative investments as returns decline.
- Changing market conditions: Liquidity dynamics and evolving monetary policy signals are influencing investor decisions.
Earlier in the year, strong demand and higher yields led to consistent oversubscriptions, but sentiment has shifted as rates continue to ease.
What it means for the economy
The undersubscription highlights a delicate balance for policymakers. While lower interest rates reduce government borrowing costs, they may also dampen investor participation in domestic debt markets.
Economists say sustained moderation in demand could prompt authorities to adjust borrowing strategies, including offer yields or auction volumes, to maintain sufficient financing.
Outlook
With the government expected to return to the market in subsequent auctions, attention will focus on whether demand stabilises or continues to soften. Analysts suggest that future investor appetite will largely depend on interest rate expectations, inflation trends, and overall confidence in the economy.
