Treasury Rates [November 7, 2022]

Security	Interest Rates
91 – Day Bill	33.3407%
182 – Day Bill	34.8511%
364 – Day Bill	34.7980%

The yields on the government’s short-term papers continued their upward trajectory this week as sources of funding for government expenditures remain heavily skewed to domestic funding. Treasury yields have stayed on a strong upward trend in 2022 on the back of a strong pickup in inflation with the yields on the 91, 182, and 364 tenors more than doubling from rates recorded at the year open. This week’s Treasury bill performance comes ahead of the announcement of consumer prices data for October, where is it expected that the inflation rate will continue to remain elevated.

The yield on the 91-day bill rose by a higher margin this week compared to last week’s 55 basis points (bps) jump. It moved up by 64 bps from 32.7044% posted last week to clear at 33.3407% this week.

The 182-day bill posted a modest gain of 59 bps this week after a strong pickup last week. It rose to 34.8511% this week from 34.2626% recorded last week.

The 364-day bill came in better than last week’s 129 bps increase after tightening by 144 bps this week. It cleared at 34.7980% this week, from 33.3568% posted last week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	32.7044%	33.3407%	0.64	1.95%	166.18%
182 – Day	34.2626%	34.8511%	0.59	1.72%	163.80%
364 – Day	33.3568%	34.7980%	1.44	4.32%	109.07%

Auction results of tender 1823 revealed that demand for the government’s short-term papers failed to meet the government’s target amount for the fourth consecutive time on the back of tight liquidity challenges as consumption expenditures rise amidst soaring consumer prices. The government’s target amount was undersubscribed by 6.0% during last Friday’s auctions.

A total of GHS 1,236.62 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 1,316.00 million. The government, constrained by limited funding sources, subsequently accepted all bids tendered.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 2,060.00 million from 91-day, 182-day, and 364-day bills.