T-bills auction: Weak demand due to shift of institutional funds into high-yielding instruments

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The persistent weak demand for treasury bills is likely due to a shift of institutional funds into higher-yielding alternatives such as fixed deposits and repos.

In addition, the Bank of Ghana’s Open Market Operations continue to attract high demand from investors.

The recent auction for the short-term bills attracted GH¢8.8 billion from banks ahead of the August 22, 2025, primary auction, further diluting liquidity in the treasury bill market.

“In the coming week, we expect investor participation to remain subdued amid modest yield compression”, Databank Research mentioned.

Last week’s primary Treasury bill auction was undersubscribed by 35.7% against the GH¢4.24 billion target.

The Treasury accepted GH¢2.73 billion from the GH¢3 billion tendered, covering only 64% of maturities worth GH¢3.84 billion.

Yields fell across the curve, with the 91-day down 6 basis points to 10.14%. Both the 182-day and 364-day papers dipping 2.0 basis points to 12.23% and 13.08% week-on-weekw, respectively.

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