Treasury Rates for January 25th 2021

Security	Interest Rates
91 – Day Bill	14.0827%
182 – Day Bill	14.1328%
364 – Day Bill	16.9645%
6 – Year Fixed Rate Bond	19.2500%

This week, the yields on the government’s 91-day and 182-day bills extended their downward trajectory for the third consecutive time despite a climb in the most recent inflation reading. This week’s Treasury yield performance comes ahead of a Monetary Policy Committee meeting later in the week where it is expected that the committee would continue to pursue its cautious stance amid a resurgence in COVID-19 cases as well as a surprise shock to the inflation outlook.

The 91-day bill declined by 1 basis point (bps) this week to build on previous week’s tiny dip. It fell from 14.0881% posted last week to 14.0827% this week, its lowest in 6 weeks.

The 182-day bill failed to post a comeback from previous week’s marginal decline as it further dipped by 1 bps this week. It fell to 14.1328% this week from 14.1431% posted last week.

The yield on the 364-day bill was little changed this week after recording a slight movement from 16.9639% at its last issuance to 16.9645%.

Week-on-Week Changes for 25^th January, 2021

Term	Previous	Current	Change	Percentage Change
91 – Day	14.0881%	14.0827%	-0.01	-0.0383%
182 – Day	14.1431%	14.1328%	-0.01	-0.0728%
364 – Day	16.9639%	16.9645%	0.00	0.0035%
6 – Year	19.5000%	19.2500%	-0.25	-1.2821%

Auction results from Bank of Ghana (BoG) tender 1730 further showed an oversubscription for the government’s short-term papers on expectations of higher inflation figures as fuel prices at the pump climbs.

A total of GHC 1,619.67 million bids were tendered for the 91-day, 182-day, and 364-day bills against the government’s target amount of GHC 1,235.00 million. The government, however, accepted only GHC 1,251.19 million of the total bids tendered.

As per the government’s issuance calendar for the first quarter of the year, a 6-year fixed-rate bond was issued which aimed at raising GHC 800 million from the domestic market. There was a strong demand for the long-term paper as it was oversubscribed by over 200% amid a decline in its rate from 19.5000% to 19.2500%. Total bids tendered and accepted came in at GHC 2,883.74 million.

Next week, the government will be expected to reduce its intended target amount to raise a total of GHC 1,129.00 million from 91-day, 182-day, and 364-day bills.