Treasury Rates [August 29, 2022]

Security	Interest Rates
91 – Day Bill	28.6142%
182 – Day Bill	29.9415%
364 – Day Bill	29.5227%

The yields on the government’s short-term Treasury papers came in with strong gains this week compared to the previous week on the back of expectations of higher inflation following the prevalence of upward price pressures on consumer goods and services. Inflation figures in the short-term are expected to hover around the current level of 31.7% following the continuous free fall of the local unit coupled with the coming on board of upward adjustment in utility tariffs. We expect investors to continue to bid higher yields for the government’s assets as consumers’ purchasing power worsens.

The 91-day bill rose by 89 basis points (bps) this week to widen its year-to-date appreciation to 128.45%. It cleared at 28.6142% this week from last week’s 27.7213% level.

The yield on the 182-day bill was up by 65 bps to send its total accumulated gains in 2022 to 16.73 percentage points. It moved up from 29.2915% posted last week to 29.9415% this week.

The 364-day bill rose for the fourteenth consecutive time this week, coming in with a gain of 70 bps from last week’s level. It cleared at 29.5227% this week, up from 28.8253% recorded at the previous issuance.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	27.7213%	28.6142%	0.89	3.22%	128.45%
182 – Day	29.2915%	29.9415%	0.65	2.22%	126.63%
364 – Day	28.8253%	29.5227%	0.70	2.42%	77.38%

Auction results of tender 1813 revealed that for the tenth consecutive time, the government’s target amount was oversubscribed as investors continue to take advantage of the rise in yields and as the international market remains shut to the government. The government’s target amount this week was oversubscribed by 56.90%.

A total of GHS 1,831.06 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 1,167.00 million. The government accepted all GHS 1,770.17 million worth of bids tendered for its 91 and 182 tenors and accepted GHS 56.04 million of the 60.89 worth of bids tendered for its 364-day bill.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 1,723.00 million from 91-day, 182-day, and 364-day bills.