The government raised GH¢3.80 billion on Friday, August 2, through the issuance of short-term debt instruments, missing its target of GH¢4.36 billion.
This resulted in an undersubscription rate of 12.85%, creating a funding gap of GH¢561 million.
Despite the attractive returns on these short-term instruments, where Treasury Bill yields surpass the June inflation rate of 22.8%, the issuance experienced lower-than-expected demand.
The undersubscription is largely attributed to reduced liquidity among primary dealers, particularly commercial banks, which are adjusting to a new cash reserve ratio requirement set by the Central Bank.
This regulatory shift is anticipated to boost lending to the private sector, aligning with the Central Bank’s broader economic objectives.
For the first half of the year, credit to the private sector has increased to 17.6%, up from 16.1% during the same period last year.
Investor preference was notably high for the 91-day Treasury Bill, with accepted bids totalling GH¢2.38 billion, followed by the 182-day bill at GH¢1.17 billion and the 364-day bill at GH¢243 million.
The yield on the 91-day bill edged up marginally by 0.04% to 24.78%, while the 182-day bill saw a slight increase of 0.02% to 26.76%. The 364-day bill yield remained steady at 27.85%.
Looking ahead, the government aims to raise GHS 6.55 billion in its upcoming T-Bill auction, targeting 91-day, 182-day, and 364-day bills to address short-term liquidity needs and align with investor appetite.