Treasury Rates [March 13, 2023]

Security	Interest Rates
91 – Day Bill	19.9998%
182 – Day Bill	22.8483%
364 – Day Bill	26.8239%

Ahead of the announcement of inflation numbers for February, Treasury bills rates continued their recent downward trend in line with efforts by the government to consolidate rates at a time when the rates on prevailing longer-dated papers are hovering over 8.00% to 10.00%. Last week witnessed a significant drop in Treasury yields after the government categorically stated its intention to reduce its interest cost burdens as the government races to achieve debt sustainability to enable it to bag a USD 3.0 billion IMF bailout. Inflation data looms large where it is expected that the second inflation print in 2023 will see another decline after the consumer price index recorded its first decline in nearly two years, last month.

The 91-day bill fell this week, extending its weeks’ of declines for the fifth consecutive time. It fell by 416 basis points (bps) from 24.1610% posted last week to clear at 19.9998% this week, its lowest since late May 2022.

The yield on the 182-day bill lost by 371 bps to build on last week’s 900 bps dip. It cleared at 22.8483% this week with a year-to-date loss of 36.50%, from 26.5564% registered last week.

The yield on the 364-day bill remained sticky downwards, having declined by 72 bps this week to clear at 26.8239% from 27.5442% posted last week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	24.1610%	19.9998%	-4.16	-17.22%	-43.44%
182 – Day	26.5564%	22.8483%	-3.71	-13.96%	-36.50%
364 – Day	27.5442%	26.8239%	-0.72	-2.62%	-25.27%

Auction results of tender 1841 revealed the prevalence of strong demand for the government’s short-term papers as both institutional and individual investors rush to take advantage of the relatively higher yields on the shorter-dated papers before yields decline any further. Accordingly, the government achieved an oversubscription rate of 74.14%.

A total of GHS 4,209.19 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 2,417.00 million. The government, however, accepted GHS 3,318.32 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 2,775.00 million from 91-day and 182-day bills.