Treasury Rates [September 19, 2022]

 

Security	Interest Rates
91 – Day Bill	29.9067%
182 – Day Bill	31.1440%
364 – Day Bill	30.4730%

The yields on the government’s short-term securities edged up this week from last week’s level after the latest consumer prices data revealed that the inflation rate rose to its worst in 21 years as the ongoing upward price pressures escalate on the back of significant increases in the prices of imported items and costs of housing and utilities. Inflation in August printed at 33.9%, up from 31.7% in July. Investors and market watchers are expecting inflation numbers to remain elevated with the coming on board of upward reviews in utility tariffs and packaged water prices.

The 91-day bill climbed up by 42 basis points (bps) to extend its year-to-date performance to +135.39%. It cleared at 29.9067% this week from 29.4838% posted last week.

The yield on the 182-day bill posted a marginal gain this week compared to last week (+83 bps), coming in with a 9 bps jump over last week’s level. It moved up from 31.0530% recorded last week to clear at 31.1441% this week.

The yield on the 364-day bill came in with a margin of increase similar to its previous performance, pointing to a steady trajectory in the yield path. The 364-day bill cleared at 30.4730% this week, up from 30.0165% recorded at its last issuance date.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	29.4838%	29.9067%	0.42	1.43%	135.39%
182 – Day	31.0530%	31.1441%	0.09	0.29%	135.05%
364 – Day	30.0165%	30.4730%	0.46	1.52%	80.35%

 

Auction results of tender 1816 showed that the strong expression of interest in shorter-term government assets by investors continued this week as the government’s target was once again oversubscribed. Bids this week, came in excess of 12.0% of the government’s target amount.

A total of GHS 1,938.04 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 1,717.00 million. The government accepted all GHS 147.15 million worth of bids tendered for the 365-day bill and accepted GHS 1,769.63 million out of GHS 1,790.89 million worth of bids tendered for the 91 and 182 tenors.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 1,331.00 million from 91-day and 182-day bills.