Ghana’s Treasury bill market has recorded a seventh consecutive undersubscription, but the more telling signal this time is not the shortfall itself but what the government chose to do about it.
At the latest auction, covering Tender 2005, the government targeted GH¢5.009 billion but received bids of GH¢4.488 billion, a gap of GH¢520.64 million or 10.39 percent below target. Rather than reject a portion of bids as it had done in previous weeks to control borrowing costs, the government accepted GH¢4.438 billion, taking in nearly all submitted bids.
The shift marks a clear departure from conditions earlier in the year, when strong liquidity and aggressive bid rejections enabled the government to compress yields while still meeting financing needs. Accepting nearly all available bids signals that meeting immediate cash flow needs is now taking precedence over strict rate discipline.
The Bank of Ghana (BoG) has significantly expanded its liquidity absorption operations, mopping up GH¢389.1 billion in the first quarter of 2026 alone, compared with GH¢46.4 billion a year earlier. This aggressive tightening posture has thinned the pool of funds available for government securities.
Investor participation spread across maturities, with the 91-day bill drawing GH¢1.9 billion, the 182-day bill attracting GH¢764.25 million, and the 364-day instrument pulling in GH¢1.8 billion. The distribution reflects a market that remains active but increasingly selective.
Yields told a mixed story. The 91-day rate edged marginally lower from 4.9244 percent to 4.9233 percent, while the 182-day yield ticked up from 6.9630 percent to 6.9715 percent. The 364-day bill showed the sharpest movement, rising from 10.1239 percent to 10.1968 percent, pointing to building pressure at the longer end of the curve.
The persistence of weak demand despite higher yields suggests investor appetite is becoming more price-sensitive, and that the yield compression seen through early 2026 may be approaching its limits.
The continued undersubscription streak highlights growing difficulties in meeting domestic borrowing targets, a trend that could exert pressure on the cedi and complicate government cash flow management. If the pattern persists, borrowing costs at longer maturities are likely to continue rising, narrowing the government’s room to finance short-term needs on favourable terms.
