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Treasury Rates [March 14, 2022]

Security Interest Rates
91 – Day Bill 13.2539%
182 – Day Bill 13.5524%
364 – Day Bill 16.9564%
5 – Year Fixed Rate Note 20.7500%

Short-term Government of Ghana (GoG) Treasury bills rates registered an uptick this week from previous week’s levels after the latest inflation rate rose sharply to touch a more than 5-year high. Persistent upward price pressures following a drastic fall in the value of the local currency amid a rise in the price of petroleum products and transport costs have been a major driver in the prices of consumer goods and services. This trend has resultantly mounted pressures on Treasury yields as investors bid higher yields to compensate them for the decline in their purchasing power.

After an impressive 12 basis points (BPS) jump last week, the yield on the 91-day strengthened further by 11 BPS this week to send its total accumulated gains to 73 BPS. It rose to 13.2539% this week from 13.1419% posted last week.

The 182-day was the star performer for the week with an 18 BPS increase from last week’s level. It soared from 13.3680% posted last week to 13.5524% this week, its highest since mid-May, 2021.

The 364-day bill was little changed this week as it rose marginally to 16.9564% this week from 16.9557% cleared last week.

Week-on-Week Changes

Term Previous Current w-o-w Change w-o-w % Change Year-to-Date
91 – Day 13.1419% 13.2539% 0.11 0.85% 5.81%
182 – Day 13.3680% 13.5524% 0.18 1.38% 2.58%
364 – Day 16.9557% 16.9564% 0.00 0.00% 1.88%
5 – Year 21.0000% 20.7500% -0.25 -1.19%

Auction results from the Bank of Ghana (BoG) tender 1789 showed a strong expression of interest in short-dated GoG assets as investors continue to bid at higher rates on the back of expectations of higher inflation figures.

A total of GHS 1,478.49 million worth of bids were tendered for the 91-day, 182-day, and 364-day bills against the government’s target amount of GHS 1,402.00 million. The government accepted all bids tendered.

As part of the government’s issuance calendar for the first quarter of the year, a 5-year paper was issued to raise GHS 1,000.00 million from the domestic market. A total of GHS 862.76 million worth of bids were tendered and subsequently accepted at a rate of 20.7500%, down from last year’s closing rate of 21.0000%.

In the week ahead, we expect the government to raise a total of GHS 1,041.00 million from 91-day and 182-day bills. Later in the month, we also expect the government to return to the domestic market to raise a total of GHS 800 million from 10-year paper.

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