Lower Target Drove Treasury Oversubscription Says Analyst

Treasury Bills

Ghana’s caller treasury measure oversubscription reflects a reduced borrowing people alternatively than improving capitalist confidence, according to a starring marketplace expert who says celebrations would beryllium premature and perchance misleading.

Nelson Cudjoe Kuagbedzi, Head of Finance astatine Merban Capital, explained that past week’s awesome 110 percent oversubscription resulted chiefly from the authorities mounting a overmuch smaller fundraising extremity aft six consecutive weeks of undersubscription. The authorities sought conscionable 2.8 cardinal Ghana cedis (GH¢) but received bids exceeding 6 cardinal cedis, yet accepting 5.7 cardinal cedis astatine the November 28, 2025 auction.

Speaking to JoyNews successful an interrogation monitored by The High Street Journal, Kuagbedzi emphasized that the debased people made the beardown effect little astonishing than header figures suggest. He described the oversubscription arsenic a earthy result erstwhile authorities request falls good beneath mean levels, allowing investors to taxable importantly much bids than required.

“It is intelligibly arsenic a effect of the little people that the authorities acceptable for the week,” helium said. “Government, for the week, intended to rise astir 2.8 cardinal Ghana Cedis, but the bids that were submitted were a small implicit 6 cardinal Ghana Cedis, and the authorities ended up accepting astir 5.7 cardinal Ghana Cedis. And so, the oversubscription for this week is fundamentally a effect of the little people that the authorities set.”

The concern adept noted that treasury bills relation much arsenic a refinancing level for galore organization investors, peculiarly pension money managers who look regulatory requirements preventing them from keeping funds idle. With constricted short-term concern alternatives disposable successful Ghana’s existent marketplace environment, these investors proceed channeling wealth into 91-day bills careless of prevailing involvement rates oregon broader economical sentiment.

This structural dynamic means overmuch of the information stems from necessity alternatively than optimism astir authorities creditworthiness oregon economical prospects. Pension funds and akin institutions indispensable deploy their superior somewhere, and treasury bills stay among the fewer viable short-term options gathering regulatory requirements for information and liquidity.

Kuagbedzi cautioned against interpreting 1 week’s auction results arsenic grounds of restored capitalist confidence. He argued that investors rolling implicit maturing bills oregon temporarily parking funds volition people proceed participating successful the market, whether oregon not they consciousness assured astir Ghana’s economical trajectory oregon fiscal management.

“We cannot conscionable trust connected a azygous auction for today, and conscionable gully the decision that capitalist assurance is really going up,” helium stressed. “The marketplace volition unit you to conform. So definitely, banks volition beryllium forced to trim their rates. They can’t bash thing astir it. If not, contention volition footwear you out.”

The informing comes arsenic Ghana emerges from a prolonged play of treasury marketplace weakness. The authorities recorded six consecutive weeks of undersubscription earlier past week’s result, with investors showing reluctance to sorb authorities indebtedness astatine prevailing yields contempt Ghana’s constricted alternate financing sources.

Market information shows yields connected the 91-day measure stood astatine 11.05 percent during the latest auction, down somewhat from 11.13 percent the erstwhile week. The 182-day measure yielded 12.43 percent, falling from 12.68 percent, portion the 364-day measure cleared astatine 13.08 percent. These rates bespeak the Bank of Ghana’s assertive monetary easing cycle, which has seen the argumentation complaint chopped by 1,000 ground points during 2025.

The authorities plans to rise a substantially larger 5.8 cardinal cedis successful its upcoming auction this week, presenting a much challenging trial of marketplace appetite. This higher borrowing people volition supply clearer denotation of whether the erstwhile week’s oversubscription represents sustainable betterment oregon simply reflected opportunistic timing with an unusually debased target.

Kuagbedzi recommended that authorities officials and marketplace observers look beyond azygous auction results and alternatively absorption connected sustained trends, marketplace depth, and capitalist behaviour crossed aggregate weeks earlier making declarations astir restored confidence. He argued that drafting steadfast conclusions from isolated information points risks creating mendacious impressions astir underlying marketplace conditions.

Treasury bills person go Ghana’s superior financing conveyance since the state mislaid entree to planetary superior markets pursuing sovereign recognition standing downgrades. The authorities besides faces constricted home enslaved marketplace enactment aft implementing a home indebtedness speech programme successful December 2022, making play treasury measure auctions captious for gathering short-term financing needs.

The concern analyst’s skeptical appraisal contrasts with much optimistic interpretations immoderate marketplace participants offered pursuing the oversubscription. Several observers had suggested the effect indicated improving sentiment aft weeks of concerning undersubscription that threatened the government’s quality to conscionable recurring expenditure obligations and refinance maturing debt.

Whether capitalist assurance is genuinely improving oregon the oversubscription simply reflected method factors related to people mounting volition go clearer arsenic upcoming auctions unfold. The substantially higher borrowing people for this week’s auction should uncover whether request remains robust erstwhile the authorities seeks larger amounts much accordant with mean financing requirements.

Ghana’s fiscal operations beryllium heavy connected accordant treasury measure demand, making auction show a captious indicator of marketplace assurance successful authorities creditworthiness and economical management. Sustained oversubscription would awesome restored trust, portion continued volatility could bespeak deeper structural challenges requiring argumentation involution beyond elemental people adjustments.

For now, Kuagbedzi’s investigation suggests past week’s affirmative effect offers constricted grounds that cardinal capitalist sentiment has shifted. He maintains that the awesome numbers stemmed chiefly from method factors alternatively than renewed religion successful Ghana’s economical prospects oregon fiscal trajectory.