T-bills auction: Government fails to meet target for 7th consecutive week; interest rates surge

The government failed to meet its treasury bills target for the 7th consecutive week. According to the auction results by the Bank of Ghana, the government recorded about 10% undersubscription of its auction target. Investors bought T-bills worth a little over GH¢4.48 billion, as against a target of GH¢4.89 billion, but accepted about GH¢4.0 billion of the bids.

The 91-day bill was the most subscribed bill as GH¢1.89 billion of the bids were tendered, representing 42.2% of the total bids, with an uptake of GH¢1.88 billion. The 364-day bill also recorded bids of about GH¢1.8 billion, with bids accepted a little above GH¢1.7 billion. For the 182-day bill, GH¢764.25 million of the bids were tendered and accepted.

Interest rates continued to rise at the longer end of the curve. The yield on the 91-day bill remained unchanged at 4.92%. The yield on the 182-day bill went up to 6.97% from the previous week's 6.96%. The yield on the 364-day bill inched up by 7.0 basis points to 10.19%. The continuous undersubscription of the short-term instruments by the government is a cause for concern.