Treasury Rates [October 31, 2022]

 

Security	Interest Rates
91 – Day Bill	32.7044%
182 – Day Bill	34.2626%
364 – Day Bill	33.3568%

Treasury yields were up again this week on the back of expectations of higher inflation numbers after some Oil Marketing Companies adjusted their ex-pump fuel prices ahead of November’s first pricing window. The significant upward adjustment in fuel prices became apparent following the Cedi’s drastic fall over the past few weeks before steadying later last week. Investors accordingly bid higher yields for the government’s short-term papers to hedge against the sharp rise in the prices of consumables. We expect yields on short-term papers continue to pick steadily ahead of the announcement of October’s inflation number.

The yield on the 91-day bill went up by 55 basis points (bps) this week, adding onto last week’s 76 bps jump. It cleared at 32.7044% this week, up from 32.1554% posted last week.

The 182-day bill posted its biggest weekly increase in more than twenty weeks, having gone up by 118 bps this week, compared to last week’s 84 bps climb. It moved up from 33.0785% posted last week to clear at 34.2626% this week.

The 364-day bill came in as the star performer for the week, recording its biggest weekly increase since mid-June. It went up by 129 bps to clear at 33.3568% this week, from 32.0690% recorded last week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	32.1554%	32.7044%	0.55	1.71%	161.10%
182 – Day	33.0785%	34.2626%	1.18	3.58%	159.34%
364 – Day	32.0690%	33.3568%	1.29	4.02%	100.42%

 

Auction results of tender 1822 revealed that demand failed to meet the government’s target amount for the third consecutive time as the market examines the inflationary path and as expenditure levels rise ahead of the festive season. The target amount was undersubscribed by 37.6%.

A total of GHS 703.56 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 1,124.00 million. The government, however, could only accept GHS 701.42 million worth of bids tendered for its short-term assets.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 1,316.00 million from 91-day, 182-day, and 364-day bills.