Treasury Rates for February 22nd 2021

Security	Interest Rates
91 – Day Bill	13.1130%
182 – Day Bill	13.9503%
2 – Year Term Note	17.6000%

Short-term Government of Ghana (GoG) Treasury bills rates extended its downward trajectory in 2021 for the fifth consecutive time as investors continue to flock to safety amid a resurgence in COVID-19 cases and its subsequent impact on corporate assets. The continuous drop in the yields on the government’s short-term assets comes amid expectations of higher inflation rates as the prices of petroleum products climbs significantly.

The yield on the 91-day bill tumbled by 12 basis points (bps) this week to send its accumulated loss in 2021 to almost 1 percentage point. It declined from 13.2322% posted last week to 13.1130% this week, its lowest in more than 3 years.

After recording a 5 bps decline last week, the yield on the 182-day failed to post a comeback as it further lost 1 bps this week. It fell to 13.9503% this week from 13.9614% recorded last week.

Week-on-Week Changes for 22^nd February, 2021

Term	Previous	Current	Change	Percentage Change
91 – Day	13.2322%	13.1130%	-0.12	-0.9008%
182 – Day	13.9614%	13.9503%	-0.01	-0.0795%
2 – Year	18.5000%	17.6000%	-0.90	-4.8649%

Auction results from Bank of Ghana (BoG) tender 1734 further showed a continuous and a growing demand for the government’s short-term assets as bids tendered came in excess of 68% of the target amount. This follows weeks of similar strong demand in Treasury assets.

A total of GHC 1,298.58 million bids were tendered for the 91-day and 182-day bills against the government’s target amount of GHC 773 million. The government accepted all bids tendered for the 91-day and accepted only GHC 666.93 million worth of bids out of GHC 1,197.92 million worth of bids tendered for the 182-day bill.

As per the government’s issuance calendar for the first quarter of the year, the government issued a 2-year term-note in which it sought to raise a total of GHC 1,820.00 million from the domestic market. There was, however, a strong demand for the term-note as it was 100% oversubscribed. The yield on the term-note subsequently declined by 90 bps to 17.6%, its lowest in more than 2 years.

Next week, the government will be expected to slightly increase its intended target amount to raise a total of GHC 889.00 million from 91-day, 182-day, and 364-day bills.