Treasury Rates [May 09, 2022]

Security	Interest Rates
91 – Day Bill	17.8800%
182 – Day Bill	18.8060%
364 – Day Bill	20.6521%
2 – Year Fixed Rate Note	21.5000%
5 – Year Fixed Rate Bond	22.3000%

In a busy week that saw the Government issue 5 separate papers across different tenors, Treasury yields extended their upward trajectory following the persistence of inflationary pressures. The inflation rate for April is expected to be announced later in the week where it is anticipated that the continuous adjustment in the prices of goods and services buoyed by increases in fuel and transport costs will drive the inflation rate to hover over the region of 15.0% and 20.0%.

The 91-day bill climbed up by 47 basis points (bps) this week to send its total accumulated gains to date to 5.36 percentage points. It cleared at 17.8800% this week, up from 17.4085% posted last week,

After last week’s impressive 110 bps gain, the yield on the 182-day bill posted a moderate gain of 28 bps but with a year-to-date gain of 42.35%. It moved up from 18.5268% registered last week to 18.8060% this week.

The yield on the 364-day bill rose to a record high at 20.6521% after recording a 98 bps increase from its last issuance at 19.6735%.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	17.4085%	17.8800%	0.47	2.71%	42.75%
182 – Day	18.5268%	18.8060%	0.28	1.51%	42.35%
364 – Day	19.6735%	20.6521%	0.98	4.97%	24.08%
2 – Year	19.7500%	21.5000%	1.75	8.86%	8.86%
5 – Year	20.7500%	22.3000%	1.55	7.47%	7.47%

Auction results from the Bank of Ghana (BoG) tender 1797 showed weaker demand for the government short-term papers as investors thronged to the longer-dated papers with improved yields.

A total of GHS 953.37 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 1,408.00 million. The government, constrained by a continued and sustained sluggish demand for its papers accepted all bids tendered.

2-year and 5-year papers issued this week similarly followed the recent upward trend in rates as the papers both inched up by 175 and 155 bps each. The 2-year paper moved up from 20.7500% at its last issuance in February to 21.5000% whilst the 5-year bond rose from 20.7500% in March to 22.3000%.

In the week ahead, we expect the government to raise a total of GHS 1,961.00 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.