Treasury Rates [August 15, 2022]

Security	Interest Rates
91 – Day Bill	27.3416%
182 – Day Bill	28.7341%
364 – Day Bill	28.8253%

This week, short-term Government of Ghana Treasury bills rates stayed on an upward trajectory, adding to previous weeks’ performances after inflation rate came in stronger than expected to print at its highest since November 2003. The inflation rate was reported at 31.7% in July, up from 29.8% in June as prices of imported items continue to mount upward pressures on consumer prices. We expect to find the jump in the inflation reading to drag future Treasury yields further upwards in the near term to compensate investors for the loss in their purchasing power.

The 91-day bill posted a moderate gain compared to its movement last week with a gain of 30 basis points (bps) this week compared to last week’s 33 bps jump. It strengthened from 27.0411% posted last week to clear at 27.3416% this week.

The magnitude of increase on the 182-day bill was similarly calm this week with a gain of 22 bps compared to last week’s 25 bps gain. It cleared at 28.7341% this week, up from 28.5092% posted last week.

The yield on the 364-day bill added 42 bps gain to send its total accumulated gains in 2022 to 12.14 percentage points and with a year-to-date gain of 73.19%. It moved up from 28.4048% posted last week to clear at 28.8253% this week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	27.0411%	27.3416%	0.30	1.11%	118.29%
182 – Day	28.5092%	28.7341%	0.22	0.79%	117.49%
364 – Day	28.4048%	28.8253%	0.42	1.48%	73.19%

Auction results of tender 1811 have revealed that for the eighth consecutive time, the government’s target amount was oversubscribed as investors continue to show strong expression of interest in the government’s short-term papers on the back of improved yields and expectations of higher inflation numbers. This week, the government’s papers were oversubscribed by a little over 30%.

A total of GHS 1,862.97 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 1,410.00 million. The government, however, accepted GHS 1,839.76 million worth of the total bids submitted.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 823.00 million from 91-day and 182-day bills.