Databank Research is warning that the treasury bill market will remain under significant strain in the coming weeks as the government battles weak bid volumes and large rollover obligations.

This is expected to keep yields elevated in the near term.

The firm notes that the 2026 Budget signals even heavier reliance on T-bills to rebuild cash buffers, reflecting expectations of sustained short-term funding demand by the government.

This strategy, analysts caution, could push yields further above current levels unless market liquidity improves substantially.

However, Databank adds that the pace at which yields adjust will depend heavily on movements in the Monetary Policy Rate (MPR) and the broader liquidity environment. With liquidity still tight and investors demanding higher compensation for short-term lending, treasury financing is likely to remain costly.

The warning comes on the back of another underwhelming auction performance last week. The Treasury mobilised GHS 3.83 billion at last week’s auction, representing 30.46% below the GHS 5.68 billion target. The shortfall underscores persistent tightening in market liquidity and investors’ reluctance to lock in at current rates despite repeated attempts by government to raise short-term funds.

Meanwhile, yields continued their upward drift across the curve.

Analysts say the combination of missed targets, rising yields and sustained funding needs points to a challenging period ahead for the government’s short-term borrowing strategy, with little relief expected unless liquidity conditions improve.