Treasury Rates for August 16th, 2021

Security	Interest Rates
91 – Day Bill	12.5215%
182 – Day Bill	13.3064%
364 – Day Bill	16.2880%

The disparity between the yields on the government’s short-term assets and the inflation rate further widened this week as the latest inflation rate edged higher whilst Treasury bills rates tumbled further this week. Inflation rate for July climbed to 9.0%, up from 7.8% as prices of food items, utilities, and transport continue to mount an upward pressure on consumer prices. The persistence of upward price pressures has however failed to impact Treasury yields as the 91-day bill has so far recorded a year-to-date (ytd) depreciation of 11.5% which compares with a ytd depreciation of 4.5% over the same time last year.

The yield on the 91-day bill dipped by 5 basis points (bps) this week, wiping off 1.6 percentage points from its 2021 opening figure. It declined to 12.4701% this week from 12.5215% recorded last week.

After posting a brief gain, the 182-day has resumed its downward streak as it further plunged by 5 bps this week, adding onto last week’s 6 bps loss. It fell from 13.3064% posted last week to 13.2555% this week.

The yield on the 364-day sustained its biggest week-on-week loss this week as it shed 17 bps. It weakened from 16.2880% posted last week to 16.1134% this week, its lowest in more than 2 years.

Week-on-Week Changes

Term	Previous	Current	Change	Percentage Change	Year-to-Date
91 – Day	12.5215%	12.4701%	-0.05	-0.41%	-11.53%
182 – Day	13.3064%	13.2555%	-0.05	-0.38%	-6.32%
364 – Day	16.2880%	16.1134%	-0.17	-1.07%	-5.01%

Auction results from Bank of Ghana (BoG) tender 1759 showed an impressive demand for the government’s short-term assets as investors remain hopeful that expectations of higher inflation figures will soon reverse the downward trend in Treasury yields.

A total of GHC 1,316.55 million worth of bids were tendered for the 91-day, 182-day, and 364-day bills against the government’s target amount of GHC 1,161.00 million. The government, constrained by a tight fiscal space went ahead to accept all bids tendered.

Next week, the government will be seeking to raise a total of GHC 596.00 million from 91-day and 182-day bills.