Treasury Rates [January 16, 2023]

The yields on the government’s short-term assets were mixed at last Friday’s auction as the 91 and 182 tenors dipped from levels cleared last week, whilst the 364 tenor registered an uptick. Treasury yields in the first three weeks of the year have widely been choppy after Treasury rates were seen to have peaked in December last year. This week’s Treasury performance comes after inflation was reported to have closed 2022 at a 54.1%, the highest in more than twenty—five years. As inflation is anticipated to hover over the region of 50.0±10.0% in the short to medium term, it is expected that the yields on Treasury papers will continue to remain widely stable as the government pursues its debt restructuring agenda.

The 91-day bill failed to build on a series of gains posted over the past few weeks as it declined by 20 basis points (bps) this week. It fell from 35.6595% posted last week to clear at 35.4643% this week.

The yield on the 182-day bill plunged yet again this week as it struggles to maintain steam. It plummeted by 11 bps to 35.8332% this week from 35.9471% posted last week.

The 364-day bill, the only gainer at last Friday’s auction, climbed up marginally by 2 bps. It moved up from 35.8944% at last week’s auction to clear at 35.9152% this week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	35.6595%	35.4643%	-0.20	-0.55%	0.29%
182 – Day	35.9471%	35.8332%	-0.11	-0.32%	-0.41%
364 – Day	35.8944%	35.9152%	0.02	0.06%	0.06%

Auction results of tender 1833 revealed a growing strong demand for the government’s short-term papers as the target amount was again oversubscribed with the government achieving an oversubscription at a rate of 53.0%.

A total of GHS 1,720.67 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 1,125.00 million. The government accepted all GHS 1,677.33 million worth of bids tendered for the 91 and 182 tenors but could only accept GHS 36.08 million out of a total of GHS 43.34 million worth of bids tendered for the 364 tenor.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 2,415.00 million from 91-day, 182-day, and 364-day bills.