Treasury Rates [July 25, 2022]

Security	Interest Rates
91 – Day Bill	26.3403%
182 – Day Bill	28.0613%
364 – Day Bill	27.8549%
3 – Year Bond	29.8500%

Government papers this week cleared higher from previous levels ahead of the presentation of two key economic data where market watchers will be on the lookout for the posture of the government towards revenue mobilization, debt management, and monetary policy stance. The finance minister is due later in the day to present the mid-year budget review where attention will be drawn to how government revenue has performed and the strategies to bridge the fiscal gap. Also in the day, the central bank will announce its benchmark rate which will inform markets about the direction of future interest rates.

The yield on the 91-day bill was up by 39 basis points (bps) extending its weekly gains for the twenty-sixth consecutive time. It cleared at 26.3403% this week from 25.9550% last week.

The 182-day bill came in slower from last week’s level with a gain of 60 bps compared to last week’s 91 bps gain. It rose from 27.4616% posted last week to 28.0613% this week.

The 364-day bill continued its record run, coming in with a gain of 36 bps this week from 6 bps gain at its last issuance date. It cleared higher at 27.8549% this week from 27.4901% recorded last week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	25.9550%	26.3403%	0.39	1.48%	110.29%
182 – Day	27.4616%	28.0613%	0.60	2.18%	112.40%
364 – Day	27.4901%	27.8549%	0.36	1.33%	67.36%
3 – Year	25.0000%	29.8500%	4.85	19.40%	45.61%

Auction results of tender 1808 showed an impressive interest in the government’s short-term papers on the back of improvement in rates as yields gradually inches closer to the prevailing inflation rate. The government’s target was oversubscribed for the fourth consecutive time by a little over 20% this week.

A total of GHS 2,411.40 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 1,947.00 million. The government accepted GHS 2,407.85 million worth of bids from the total bids tendered.

Also this week, the government issued its first longer-dated paper in nearly two months in which it attracted GHS 1,116.85 million worth of bids for its 3-year fixed-rate bond. In line with recent trends, the yield on the bond cleared higher having jumped by 485 bps to clear at 29.8500% from 25.0000% at its last issuance date in mid-May, 2022.

In the week ahead, we expect the government to return to the domestic market in an attempt to raise GHS 564.00 million from 91-day and 182-day bills.