Treasury Rates [April 4, 2022]

Security	Interest Rates
91 – Day Bill	14.8455%
182 – Day Bill	15.4597%

Expectations of higher inflationary figures continue to drive the rates on the government’s short-term securities as investors asked for higher yields at Friday’s Treasury auction. The inflation rate shot up to a more than 5-year high in February following a drastic rise in ex-pump prices amid a sharp decline in the value of the local currency against some of its major trading partner currencies. This trend has prompted a general rise in rates with the monetary policy rate being hiked by 250 basis points (bps) at the last sitting of the monetary policy committee.

The yield on the 91-day bill strengthened by 70 bps this week adding to last week’s 73 bps gain to send its accumulated gains to 232 bps with a year-to-date gain of 18.52%. It cleared at 14.8455% this week from 14.1435% posted last week.

The 182-day bill broke through the 15.0000% levels for the first time since May 2020 as it registered its biggest weekly rise yet this week, climbing up by 95 bps this week against last week’s 90 bps gain. It rose from 14.5125% recorded last week to 15.4597% this week.

Week-on-Week Changes

Term	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	14.1435%	14.8455%	+0.70	4.96%	18.52%
182 – Day	14.5125%	15.4597%	+0.95	6.53%	17.02%

Auction results from the Bank of Ghana (BoG) tender 1792 showed that for the second consecutive time, the government failed to secure its target as investors continue to examine the capability of the government to settle maturing debt obligations after data revealed that the public debt stock peaked at a more than 80% of GDP.

A total of GHS 463.65 million worth of bids were tendered for the 91-day and 182-day bills against the government’s target amount of GHS 766.00 million. The government, constrained by tight financing conditions, accepted all bids tendered.

In the week ahead, we expect the government to raise a total of GHS 1,509.00 million from 91-day, 182-day, and 364-day bills.