After meeting its Treasury bills sale target for the first time last week since the middle of March 2021, government has once again returned to the trajectory of under-subscription, signaling low money in circulation.

The government was looking to mobilize GH¢791 million for the 91-day and 182-day Treasury bills but got a little above GH¢628 million cedis. This indicates a shortfall of its target by about 20%.

It is therefore quite surprising because it is coming just a week after successfully exceeding the sale of the T-Bills target marginally, following about six weeks of under-subscription of the short term securities. That could signal low money in circulation, due to liquidity squeeze on the interbank market.

Despite the short fall in raising money from the domestic market, the interest costs however fell marginally with the 91-day going down by about 0.02%. This could save government some cost.

But if government is not raising enough funds on the domestic market to finance its budget, then it may have to increase the interest yield slightly to attract investors.

Since the middle of March this year, liquidity has tightened on the interbank market though the banks have invested more in the government securities then lending in the first two months of this year.