Treasury Rates [August 08, 2022]

Ahead of the release of consumer prices data for the month of July later in the week where the inflation rate will be expected to hover in the 25.0% to 30.0% region, short-term Government of Ghana bills tightened further this week to build on previous week’s levels. Inflation in July will be expected to show moderate growth on the back of the reduction in ex-pump prices and as prices of foodstuffs remained relatively stable. The continuous and sharp decline in the value of the local currency may however mount an upward pressure on the consumer price index.

The 91-day bill extended its weekly gains for the twenty-eighth consecutive time this week, coming in with a 33 basis points (bps) increase. It cleared at 27.0411% this week, up from 26.7149% posted last week.

The yield on the 182-day bill rose by 25 bps this week, better than last week’s 19 bps climb. It moved up from 28.2552% posted last week to clear at 28.5092% this week.

The 364-day bill came in as the star performer for the week with a 55 bps jump after weeks of registering modest increases. It cleared at 28.4048% this week, from 27.8549% posted last week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	26.7149%	27.0411%	0.33	1.22%	115.89%
182 – Day	28.2552%	28.5092%	0.25	0.90%	115.79%
364 – Day	27.8549%	28.4048%	0.55	1.97%	70.66%

Auction results of tender 1810 showed a strong expression of interest in government papers on the back of improved yields as bids submitted came in excess of the government’s target amount for the seventh consecutive time. The government’s target amount this week was oversubscribed by 16.0%.

A total of GHS 1,337.73 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 1,153.00 million. The government accepted all GHS 1,069.31 bids tendered for the 91 and 364 tenors and accepted GHS 232.40 million from GHS 268.43 million worth of bids tendered for the 182-day bill.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 1,410.00 million from 91-day, 182-day, and 364-day bills.