Treasury Rates [February 20, 2023]

Security	Interest Rates
91 – Day Bill	35.6672%
182 – Day Bill	35.7176%

In line with the recent dip in the year-on-year inflation figure, the yields on the government’s short-term papers fell this week from levels seen last week as signs that global inflation numbers may have peaked become more elaborate. Treasury bills rates have generally been erratic over the past few weeks with yields mostly trending downwards, supporting growing expectations of lower inflation numbers. Data released by the Ghana Statistical Services last week revealed that the inflation rate declined for the first time since June 2021 to print at 53.6% in January, having slowed down from a high of 54.1% at the close of 2022. We expect Treasury yields to be pressured downwards as institutional investors continue to throng to short-term papers and as stable fuel prices calm pressures on consumer goods and services.

The 91-day bill fell for the second consecutive time this week, further narrowing its year-to-date gains to 0.86% from a high of 1.08%. It dipped from 35.7339% recorded last week to clear at 35.6672% this week.

Gains seen in the performance of the 182-day bill over the past two weeks were short-lived as the yield on the 182-day bill declined this week by 13 basis points (bps) to clear at 35.7176%, down from 35.8448% posted last week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	35.7339%	35.6672%	-0.07	-0.19%	0.86%
182 – Day	35.8448%	35.7176%	-0.13	-0.35%	-0.73%

Auction results of tender 1838 revealed that in the absence of fresh issuance of longer-dated papers coupled with limited trading activities, there was a massive expression of interest in the government’s short-dated papers by both individuals and institutional investors with the subscription rate topping 182.0%.

A total of GHS 3,109.34 million worth of bids were tendered for the 91 and 182 tenors against the government’s target amount of GHS 1,708.00 million. The government, however, in a bid to cut its interest payment cost, accepted GHS 2,758.65 million of the total bids tendered.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 2,885.00 million from 91-day, 182-day bills, and 364-day bills.