Treasury Rates [November 14, 2022]

Security	Interest Rates
91 – Day Bill	34.3945%
182 – Day Bill	35.4992%
364 – Day Bill	35.0768%

Treasury yields this week went further up from previous week’s levels in line with the recent uptick in the inflation rate for October. The inflation rate came in red-hot at 40.4% at the start of the last quarter of the year buoyed by a sharp decline in the value of the local currency coupled with the galloping prices of petroleum products and transport costs. To compensate investors for the loss in their purchasing power as a result of soaring consumer prices, yields have stayed on an upward trajectory in most parts of the year. We expect to find the upward pressures on consumer goods to continue to drag yields further upward.

The 91-day bill was the biggest gainer this week, coming in with a jump of 105 basis points (bps) as against last week’s gain of 64 bps gain. It moved up from 33.3407% at last week’s auction to clear at 34.3945% this week.

The yield on the 182-day bill gained by a similar margin posted last week, rising up by 65 bps this week. It rose to 35.4992% this week from 34.8511% posted last week.

The 364-day bill rose by the least at last Friday’s auction, failing to climb up by a similar magnitude registered last week. It gained by 28 bps to 35.0768% this week, from 34.7980% posted last week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	33.3407%	34.3945%	1.05	3.16%	174.59%
182 – Day	34.8511%	35.4992%	0.65	1.86%	168.70%
364 – Day	34.7980%	35.0768%	0.28	0.80%	110.75%

Auction results of tender 1824 showed that the government failed to raise its target amount for the fifth time running on the back of declining investor sentiment amid a tight liquidity environment. The government’s target amount was undersubscribed by 3.7%.

A total of GHS 1,983.24 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 2,060.00 million. The government, however, could only accept GHS 1,977.41 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 1,168.00 million from 91-day and 182-day bills.