Treasury Rates [May 23, 2022]

Security	Interest Rates
91 – Day Bill	19.0807%
182 – Day Bill	20.7640%
3 – Year Fixed Rate Bond	25.0000%

Ahead of the announcement of a key monetary policy rate where the attention of market watchers is tilted towards what margin of increase the central bank will deliver, the yields on short to medium-term Government of Ghana papers rose from their previous levels in line with expectations. The inflation rate has climbed up by nearly 10 percentage points since the last monetary policy committee meeting in March, leaving the committee in a tight stance as the direction of the policy rate could have an unbearable impact on the cost of credit.

The 91-day bill added 85 basis points (bps) to its 35 bps gain registered last week as it sent its overall gains to 6.55 percentage points. It rose from 18.2262% posted last week to 19.0807% this week.

After recording a 46 bps gain last week, the yield on the 182-day bill jumped up by 150 bps. It cleared at 20.7640% this week, up from 19.2623% cleared last week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	18.2262%	19.0807%	0.85	4.69%	52.33%
182 – Day	19.2623%	20.7640%	1.50	7.80%	57.17%
3 -Year	20.8500%	25.0000%	4.15	19.90%	21.95%

Auction results of tender 1799 revealed that investors remained cautious of locking in their funds in a highly inflationary environment. Demand subsequently fell short of the government’s target amount.

A total of GHS 821.69 million worth of bids were tendered for the 91 and 182 tenors against the government’s target amount of GHS 875.00 million. The government accepted all bids tendered for the 91-day bill and accepted GHS 163.82 million worth of bids out of GHS 166.82 million bids tendered for the 182-day bill.

The government also issued a 3-year fixed-rate bond this week with demand coming in at GHS 470.41 million. The paper cleared at 25.0000%, the highest in more than 6 years.

In the week ahead, we expect the government to raise a total of GHS 1,282.00 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.