The entire demand for the Treasury bill auction last week fell 22.12% short of the target, resulting in an undersubscription.
The outcome follows a steep decline in the interest rate given on the 56-day Bank of Ghana (BoG) bill and ends a run of three straight oversubscriptions.
The government raised GHS 8.58 billion but only managed to obtain GHS 6.69 billion, according to the most recent BoG data.
The 91-day bill received bids totaling GHS 4.99 billion out of GHS 5.02 billion.
The 364-day bill had GHS 452 million in approved bids out of a total of GHS 490 million, while the 182-day bill had GHS 1.23 billion deducted from GHS 1.37 billion in bids.
According to analysts, the government’s persistent rejection of high-yield bids and the increasing cash flows into the BoG’s Monday and Wednesday auctions, which raised over GHS 6.2 billion before Friday’s sale, are the reasons for the undersubscription.
The yields on short-term securities, which ranged from 10% to 13%, kept declining.
The yield on 91-day bills dropped 9 basis points to 10.20%, the yield on 182-day bills dropped 10 basis points to 12.25%, and the yield on 364-day bills dropped 14 basis points to 13.10%.
The upcoming auction is expected to bring in GHS 4.24 billion for the government.
Source: newsthemegh.com