Treasury Rates [December 19, 2022]

Security	Interest Rates
91 – Day Bill	34.9278%
182 – Day Bill	36.0337%
364 – Day Bill	36.1040%

The yields on the government’s short-term papers fell across the tenors from levels seen last week in what appears to be the beginning of an ease to the rising interest rates trajectory. The yields on the 91-day and 182-day bills declined for the second time in a row this week despite the latest inflation number coming in red-hot at a more than 25-year high at 50.3% in November. The decline in yields comes in response to a sudden but impressive strengthening of the Cedi against some of its major trading partner currencies as investors expect the sharp rise in consumer prices to slow down in the near term.

The 91-day bill fell by a similar margin recorded last week after it suffered 64 basis points (bps) loss this week to build on last week’s 61 bps dip. It fell from 35.5687% posted last week to clear at 34.9278% this week.

The 182-day bill declined by a larger margin compared to last week’s 20 bps loss as its year-to-date gain lowered further from a peak of 178.0% at the month’s open to 172.8%. It fell by 50 bps this week to clear at 36.0337% from 36.5289% registered last week.

The 364-day bill suffered its first decline since late February, having shed 8 bps from a gain of 29 bps recorded last week. It cleared at 36.1040% this week, down from 36.1871% last week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	35.5687%	34.9278%	-0.64	-1.80%	178.85%
182 – Day	36.5289%	36.0337%	-0.50	-1.36%	172.75%
364 – Day	36.1871%	36.1040%	-0.08	-0.23%	116.92%

Auction results of tender 1829 showed an impressive expression of interest in the government’s short-term papers by investors after the target amount was oversubscribed by nearly 100.0%. Treasury bills have seen improved performance over the past few weeks as institutional investors invade the space.

A total of GHS 3,930.90 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 1,984 million. The government, however, accepted GHS 3,671.28 million of total bids tendered, representing 93.3% of bids tendered.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 1,438.00 million from 91-day and 182-day bills.