Treasury Rates for January 24, 2022

Security	Interest Rates
91 – Day Bill	12.5461%
182 – Day Bill	13.2121%
364 – Day Bill	16.7033%
6 – Year Fixed Rate Bond	21.7500%

This week, short-term Government of Ghana (GoG) Treasury bills rates registered an uptick in line with expectations of a rise in general interest rates following tightening financing conditions facing the government amidst a high inflationary rate environment. A recent downgrade of Ghana’s long-term foreign currency Issuer Default Rating by Fitch will be expected to culminate into increased domestic borrowing by the government to make up for any uncertainties Ghana could face from low participation in Ghanaian bonds by offshore investors.

The 91-day bill climbed up by 2 basis points (bp) this week after a marginal dip last week to send its year-to-date performance to +0.16%. It rose from 12.5213% printed last week to 12.5461% this week.

The 182-day bill was little changed this week as it rose marginally to build on last week’s 1 bps gain. It cleared at 13.2121% this week from 13.2091% recorded last week.

The 364-day bill soared by 6 bp from 16.6438% posted last week to clear at 16.7033% this week.

Week-on-Week Changes

Term	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	12.5213%	12.5461%	0.02	0.20%	0.16%
182 – Day	13.2091%	13.2121%	0.00	0.02%	0.01%
364 – Day	16.6438%	16.7033%	0.06	0.36%	0.36%
6 – Year	18.8000%	21.7500%	2.95	15.69%	–

Auction results from the Bank of Ghana (BoG) tender 1782 showed that after weeks of strong demand, interests in the shorter-term GoG securities slowed this week as investors turned their attention to the much longer-term securities offering relatively higher returns.

A total of GHC 1,144.44 million worth of bids were tendered for the 91-day, 182-day, and 364-day bills against the government’s target amount of GHC 1,356.00 million. The government accepted all bids tendered.

The government also rolled over a maturing 5-year paper into a 6-year paper in which it sought to raise GHS 2,000.00 million from the domestic market. At the close of the book-building process, a total of GHS 1,320.66 million worth of bids had been tendered, all of which were subsequently accepted. The yield on the paper rose impressively from 18.80% at its last issuance in September last year to 21.75%.

The busy week also saw a tap issue of the most recent 3-year Cedi denominated Treasury bond (reopening of tender 1779) which raised a total of GHS 532.35 million worth of bids.

In the week ahead, we expect the government to raise a total of GHS 1,191.00 million from 91-day, 182-day, and 364-day bills and later in February GHS 1,400.00 million and GHS 1,200.00 million from 2-year and 7-year papers respectively.