Treasury Rates [February 27, 2023]

Security	Interest Rates
91 – Day Bill	35.5493%
182 – Day Bill	35.5598%
364 – Day Bill	34.2136%

Growing expectations of slowing down inflation numbers continued to drag Treasury rates downwards as the yields on the government’s short-term papers cleared lower from previous week’s level. Treasury yields have over the past few weeks in 2023 remained choppy downwards driven by a host of issues including easing pressures on consumer prices coupled with strong expression of interest in the government bills. The government’s conclusion of its domestic debt exchange programme and the subsequent issuance of the new bonds is expected to boost trading on the secondary market and hence impact slightly on the performance of the short-dated papers.

The yield on the 91-day bill continued its free fall as it dipped for the third consecutive time this week. It fell by a larger margin this week compared to last week’s 7 basis points (bps) decline, lowering by 12 bps this week to clear at 35.5493% at this week’s issuance from 35.6672% last week.

The yield on the 182-day bill similarly declined by a larger margin this week compared to last week’s 13 bps dip. It fell by 16 bps this week, from 35.7176% posted last week to clear at 35.5598% this week.

The 364-day bill fell by the most, losing 1.41 percentage points this week, worsening its accumulated losses in 2023 to 1.68 percentage points. It cleared at 34.2136% this week from 35.6242% at its last issuance date.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date (%)
91 – Day	35.6672%	35.5493%	-0.12	-0.33%	0.53%
182 – Day	35.7176%	35.5598%	-0.16	-0.44%	-1.17%
364 – Day	35.6242%	34.2136%	-1.41	-3.96%	-4.68%

Auction results of tender 1839 showed an overwhelming expression of interest in the government’s short-term papers with both individual and institutional investors rushing to take positions as comparable investment options offer relatively lower returns. The government’s three-tier papers altogether achieved an oversubscription rate of 75.7%.

A total of GHS 5,067.92 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 2,885.00 million. The government in the light of its tight funding gap 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 2,776.00 million from 91-day, 182-day, and 364-day bills.