Treasury Rates [January 30, 2023]

Security	Interest Rates
91 – Day Bill	35.7144%
182 – Day Bill	35.7550%
364 – Day Bill	35.8145%

Treasury yields cleared mixed at last Friday’s auction ahead of a crucial monetary policy rate announcement where the market awaits the announcement of the policy rate to determine the path of future interest rates. Treasury yields have remained erratic so far in 2023 with the 182-day bill on a declining course whilst the 91-day and 364-day bills continue to see up and down movements. The monetary policy committee is expected to announce the first policy rate for 2023 today where the committee is widely expected to hand down another rate hike after inflation closed 2022 climbing up by 370 basis points (bps) to print at 54.1%. However, in line with the ongoing domestic debt restructuring, some market watchers are also anticipating a policy stay or a reduction in the base rate.

The 91-day bill rose marginally by 8 bps to build on last week’s 17 bps. It moved up from 35.6342% posted last week to clear at 35.7144% this week.

The 182-day bill dipped further for the fourth consecutive time, crushing by 5 bps to send its total accumulated loss in 2023 to 23 bps. It declined to 35.7550% this week from 35.8066% last week.

The yield on the 364-day bill went up by 25 bps to pare some of the 36 bps decline seen last week. It cleared at 35.8145% this week from 35.5596% posted last week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	35.6342%	35.7144%	0.08	0.23%	0.99%
182 – Day	35.8066%	35.7550%	-0.05	-0.14%	-0.62%
364 – Day	35.5596%	35.8145%	0.25	0.72%	-0.22%

Auction results of tender 1835 revealed that demand picked up steam this week with bids coming in excess of the target amount by 60.7% as institutional investors continue to show strong interest.

A total of GHS 2,053.57 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 1,278 million. The government accepted all GHS 491.45 million worth of bids tendered for its 182-day bill and accepted GHS 1,491.65 million worth of bids tendered for its 91 and 364 tenors.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 1,423.00 million from 91-day and 182-day bills.