Treasury Rates for November 8, 2021

Security	Interest Rates
91 – Day Bill	12.4827%
182 – Day Bill	13.1631%
364 – Day Bill	16.2862%
2 – Year Fixed Rate Note	20.0000%

In a busy week that saw the government issue four separate short to medium-term securities, the yields on the government’s assets simultaneously recorded some gains as investors remained hopeful that the recent pressures on consumer prices will reverse the downward trajectory in Treasury yields. This week’s Treasury performance comes ahead of the release of inflation figures for October where the inflation rate will be expected to continue to persist above the medium-term inflation target band.

The 91-day bill climbed up by 4 basis points (bps) this week to recover from last week’s 1 bps dip. It rose from 12.4464% recorded last week to 12.4827% this week, its highest since late September.

The 182-day bill rose by the same margin of loss it suffered last week. It cleared at 13.1631% this week from 13.1184% posted last week.

The 364-day bill similarly made some gains as it strengthened by 5 bps to recover from last week’s 3 bps loss. It rose to 16.2862% this week from 16.2407% recorded last week.

Week-on-Week Changes

Term	Previous	Current	w-o-w Change	Percentage Change	Year-to-Date
91 – Day	12.4464%	12.4827%	0.04%	0.29%	-11.44%
182 – Day	13.1184%	13.1631%	0.04%	0.34%	-6.97%
364 – Day	16.2407%	16.2862%	0.05%	0.28%	-3.99%
2 – Year	17.5000%	20.0000%	2.50%	14.29%	8.11%

Auction results from Bank of Ghana (BoG) tender 1771 showed that the government’s shorter-term bills were undersubscribed as investors focused on a much longer-term paper with higher returns.

A total of GHC 1,133.43 million worth of bids were tendered for the 91-day, 182-day, and 364-day bills against the government’s target amount of GHC 1,487.00 million. All bids tendered were subsequently accepted.

There was, however, strong demand for the 2-year fixed-rate term note which cleared at 20.0000%, 250 bps above last issuance’s rate. The rate on the medium-term paper was the highest since February, 2020 thus giving hopes that rates may pick up momentum sooner. The paper was oversubscribed by 81% as the government moves to rein in capital fright from offshore investors.

Next week, the government will be seeking to raise a total of GHC 1,191.00 million from 91-day and 182-day bills.