Treasury Rates [May 02, 2022]

 

Security	Interest Rates
91 – Day Bill	17.4085%
182 – Day Bill	18.5268%

Expectations of higher inflation numbers continue to drive Treasury rates upwards as the 91-day and 182-day bills cleared at a new multi-year high this week. The 91 and 182 tenors broke through the 17.00% and 18.00% levels for the first time in six years, gradually following the recent spike in inflation figures which rose to a more than 10 year high at 19.4% in March. The inflation rate is expected to remain above the upper bound of the inflation target band in the short to medium term as producers and manufacturers adjust prices to reflect the general increase in the cost of production.

The 91-day bill climbed up by 63 basis points (bps) this week to add to last week’s 45 bps gain with a year-to-date (YTD) appreciation of 34.0%. It rose from 16.7814% posted last week to clear at 17.4085% this week.

The 182-day bill came in stronger this week climbing up by 110 percentage points to surpass the 91-day bill with a YTD gain of 40.23%. It cleared at 18.5268% this week, up from 17.4243% registered last week.

Week-on-Week Changes

Term	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	16.7814%	17.4085%	0.63	3.74%	38.98%
182 – Day	17.4243%	18.5268%	1.10	6.33%	40.23%

Auction results from the Bank of Ghana (BoG) tender 1796 revealed that despite the strong pick up in Treasury rates, demand continues to remain sluggish as investors continue to assess the health of the economy as it gets back on track.

A total of GHS 453.36 million worth of bids were tendered for the 91 and 182 tenors against the government’s target amount of GHS 907.00 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 1,408.00 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.