Investors' interest in treasury bills are expected to continue declining in the coming weeks.

This is the due to the government’s balance between demand management and high-rate bid rejections will sustain modest auction.

According to Databank Research, the expected undersubscriptions are compounded by the Monetary Policy Committee’s 100 basis points hike to 28% and the 273-day bill’s liquidity absorption.

For the past two auctions, bids were undersubscribed though the government rejected some bids.

Analysts believe the tightening could slow yield compression in the money market as institutional offers dwindle.

Therefore, buffer adequacy and the timeline for reopening longer-dated bond issuances remain critical determinants of near-term yield trajectory.

Last week’s primary auction saw investors push through GH¢4.71 billion in bids, but the Treasury accepted GH¢4.11 billion, rejecting GH¢596 million.

Yields on the 91- and 182-day bills fell 2.0 basis points and 20 basis points week-on-week to 15.71% and 16.73%, while the 364-day bill held at 18.84%.

 This came ahead of the MPC’s hike in policy rate to 28% and proposed plans by the Bank of Ghana to issue a 273-day bill, reinforcing tighter liquidity conditions.