Treasury Rates [April 11, 2022]

Security	Interest Rates
91 – Day Bill	15.7406%
182 – Day Bill	15.9264%
364 – Day Bill	18.2737%
3 – Year Fixed Rate Note	20.8500%

Ahead of the announcement of consumer price statistics where it is expected that the inflation rate will continue to persist above the upper bound of the medium-term inflation target band, the yields on the short to medium-term government papers registered a strong performance as yields across the different tenors rose above the prevailing inflation figure of 15.70%. March’s inflation rate will be expected to confirm the intense upward price pressures in the first quarter of the year which have mainly been driven by increases in prices of petroleum products and currency depreciation, among others. We foresee investors continuing to bid higher yields to compensate them for the loss in purchasing power.

The 91-day bill strengthened by 90 basis points (bps) this week to extend its accumulated gains in 2022 to 3.2 percentage points with a year-to-date gain of 25.67%. It broke through the 15.00% level for the first time in 5 years to clear at 15.7406% this week from last week’s rate of 14.8455%.

After an impressive 95 bps jump last week, the yield on the 182-day recorded a moderate gain of 0.47% this week. It rose from 15.4597% posted last week to clear at 15.9264% this week.

The 364-day bill came in as the star performer for the week with an impressive jump of 1.17 percentage points. It climbed up from 17.1051% at its last issuance date to 18.2737% this week, its highest since February 2019.

Week-on-Week Changes

Term	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	14.8455%	15.7406%	+0.90	6.03%	25.67%
182 – Day	15.4597%	15.9264%	+0.47	3.02%	20.55%
364 – Day	17.1051%	18.2737%	+1.17	6.83%	9.79%
3 – Year	20.5000%	20.8500%	+0.35	1.71%	1.71%

Auction results from the Bank of Ghana (BoG) tender 1793 revealed for the third straight week, the government failed to meet its target despite the strong pickup in rates as investors continue to remain wary of the ballooning public debt stock.

A total of GHS 757.52 million worth of bids were tendered for the 91-day, 182-day, and 364-day bills against the government’s target amount of GHS 1,509.00 million. The government accepted all bids tendered for the 182 and 364 tenors and accepted GHS 575.35 million from a total of GHS 588.35 million worth of bids for the 91-day bill.

A 3-year paper was similarly issued this week with initial price guidance of 20.65%. Prevailing interest rate conditions coupled with sluggish demand pushed the yield on the medium-term paper to clear at 20.85% compared to 20.50% at the last issuance date in early January. The government accepted all GHS 407.59 million worth of bids tendered.

In the week ahead, we expect the government to raise a total of GHS 1,004.00 million from 91-day, 182-day, and 364-day bills. Securities ranging from 2-year up to 6-year are tabled to be issued in the second quarter of the year.