Treasury Rates [March 06, 2023]

Security	Interest Rates
91–Day Bill	24.1610%
182 – Day Bill	26.5564%
364–Day Bill	27.5442%

In line with efforts by the government to achieve debt sustainability, the government has been able to make significant strides towards this course by slashing down the yields on the short-term Treasury assets by an average of 10 percentage points. The government was forced to reject the highly expensive bids which were quoted above 30.0000% at last Friday’s auction. The decision by the government to embark upon an aggressive rate cut has become imperative as the government seemed to be servicing less expensive old bills with expensive new bills at a time when the nation is undergoing a restructuring of its domestic and foreign debts.

The yield on the 91-day bill accordingly fell to its lowest since mid-June, 2022 as the rate plunged by 1139 basis points (bps). It fell to 24.1610% this week from 35.5493% posted last week.

The 182-day bill was slashed down by 900 bps, sending its year-to-date (YTD) loss to 26.19%. It declined from 35.5598% recorded last week to clear at 26.5564% this week.

The yield on the 364-day bill fell by the least with a 667 bps decline to widen its YTD loss to 23.26%. It cleared at 27.5442% this week from 34.2136% posted last week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	35.5493%	24.1610%	-11.39	-32.04%	-31.68%
182 – Day	35.5598%	26.5564%	-9.00	-25.32%	-26.19%
364 – Day	34.2136%	27.5442%	-6.67	-19.49%	-23.26%

Auction results of tender 1840 confirmed the prevalence of strong interest in the government’s short-term papers despite the significant cut in rates, pointing to the continuous participation by institutional investors as Treasury bills continue to remain high yielding compared to the government’s recently issued general category bonds. The government achieved an oversubscription rate of a little over 120.0%

A total of GHS 6,152.66 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 2,776.00 million. The government, however, accepted GHS 4,525.50 million of the total bids submitted.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 2,417.00 million from 91-day, 182-day, and 364-day bills.