The government’s auction target on the money market has fallen short by GH₵755 million this week, reflecting ongoing dampening liquidity conditions. According to the latest auction results from the Central Bank, the government managed to secure GH₵4.89 billion in short-term instruments against a target of GH₵5.60 billion, resulting in an undersubscription of approximately 13.47%.
In detail, the government accepted all GH₵3.9 billion tendered for the 91-day treasury bills. Similarly, all GH₵748 million offered for the 182-day bills were also accepted. For the 364-day bill, the government accepted all bids amounting to GH₵197 million.
Despite securing the bids, the yields on treasury bills have experienced a slight increase. Interest rates for these bills now average between 24% and 27%. Specifically, the yield on the 91-day bill rose marginally by 0.02% to 24.90%, while the 182-day bill yield remained steady at 26.78%. The 364-day bill saw a slight increase of 0.01%, reaching 27.91%.
Market analysts attribute this shortfall to the high auction target set by the Treasury. The ongoing liquidity constraints are impacting the government’s ability to meet its borrowing goals fully. In response to these conditions, the Treasury plans to raise its borrowing target to GH₵5.4 billion for the next Treasury bill auction.
This situation underscores the challenges faced by the government in managing its short-term funding needs amid tightening liquidity conditions in the money market.