Treasury Rates [September 5, 2022]

Security	Interest Rates
91 – Day Bill	29.0452%
182 – Day Bill	30.2272%
364 – Day Bill	30.0165%

Short-term Treasury yields registered moderate gains this week compared to last week as yields continued their upward trajectory on the back of higher inflation expectations. Despite the strong pick-up in rates in most parts of the year, current yields on the government’s short-term papers have remained short of the prevailing inflation rate which currently stands at 31.7% and with future inflation figures expected to trend higher following the upward adjustment in utility tariffs coupled with hikes in the prices of petroleum products. We expect investors to continue to bid higher yields for the government’s assets as consumers’ purchasing power worsens.

The yield on the 91-day bill cleared higher from previous week’s level, coming in with an additional jump of 43 basis points (bps). It cleared at 29.0452% this week, up from 28.6142% recorded last week.

The 182-day bill was slightly tepid with a gain of 29 bps compared to last week’s 65 bps gain. It moved up from 29.9415% posted last week to clear at 30.2272% this week.

The 364-day bill was the star performer for the week coming in with a gain of 49 bps from previous week’s level. It cleared at 30.0165% this week, up from 29.5227% posted last week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	28.6142%	29.0452%	0.43	1.51%	131.89%
182 – Day	29.9415%	30.2272%	0.29	0.95%	128.80%
364 – Day	29.5227%	30.0165%	0.49	1.67%	80.35%

Auction results of tender 1814 showed that the government narrowly achieved its intended target amount at last Friday’s auction despite strong demand for government bills over the past eleven weeks. The target amount was oversubscribed by 3.1% compared to last week’s 56.9% oversubscription rate.

A total of GHS 1,776.55 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 1,723.00 million. The government, constrained by tight sources of funding, accepted all bids tendered.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 1,682.00 million from 91-day and 182-day bills.