Treasury Rates for September 21st 2020

Security	Interest Rates
91 – Day Bill	14.0060 %
182 – Day Bill	14.1217 %
364 – Day Bill	16.9866 %
3 – Year Fixed Rate Bond	19.0000 %

Treasury yields continue to struggle to climb to pre-COVID levels as pressures on consumer prices begin to ease following normalization in the prices of food items. The latest inflation figures released by the Ghana Statistical Service showed that national inflation for August declined from 11.4% in July to 10.5% and was on course to touching pre-COVID consumer price index ranges.

The 91-day bill weakened this week by 2 basis points (bps) after a brief marginal gain last week. It dropped to 14.0060% this week from 14.0219% posted last week.

The 182-day strengthened by 3 bps this week to recover part of previous week’s 2 bps dip. It rose from 14.0878% posted last week to 14.1216% this week, its highest in more than 3 months.

The 364-day gained 7 bps this week to build on previous issuance’s 8 bps gain. It surged from 16.9126% at its last issuance to 16.9866% this week, its highest since end-March, 2020.

Week-on-Week Changes for 21^st September, 2020

	14-Sep-20	21-Sep-20	CHANGE	PERCENTAGE CHANGE
91 – Day	14.0219%	14.0060%	-0.0159	-0.1134%
182 – Day	14.0878%	14.1216%	0.0338	0.2399%

Auction results from Bank of Ghana (BoG) tender 1712 further indicated that demand for the government’s short-term assets was sluggish as expectations of a slower inflation rate continue to rise.

A total of GHC 975.25 million bids were tendered for the 91-day, 182-day, and 364-day bills against the government’s target amount of GHC 1,004.00 million. The government accepted GHC 973.81 of the bids tendered.

Per the government’s issuance calendar, a 3-year fixed-rate bond was issued with intentions to raise a total of GHC 1,500.00 million. Demand was weak as a total of GHC 823.64 million were raised despite a rise in the yield from 18.5000% to 19.0000%.

Next week, the government will be expected to reduce its intended target amount to raise a total of GHC 735.00 million from 91-day and 182-day bills.