Treasury Rates [March 20, 2023]

Security	Interest Rates
91 – Day Bill	18.5289%
182 – Day Bill	21.2710%

Treasury bill rates extended their downward trajectory to a more than 6-month low ahead of a crucial monetary policy rate announcement, which is expected to streamline the direction of future interest rates. This week’s Treasury performance also comes ahead of the second consecutive easing of the consumer price index as a relatively stable Cedi coupled with significant declines in the prices of petroleum products lessens price pressures on consumer goods and services. We expect a further drop in short-term Treasury yields as expectations of slowing inflation rates amidst strong demand for government papers create a policy space for the government to continue to borrow at a lower cost.

The yield on the 91-day bill fell by 147 basis points (bps) this week to extend its accumulated losses in 2023 to 1741 bps. It cleared at 18.5289% this week, from 19.9998% recorded last week.

The rate on the 182-day fell for the fifth time in a row, adding 158 bps loss to last week’s 371 bps dip. It slowed down from 22.8483% posted last week to clear at 21.2710% this week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	19.9998%	18.5289%	-1.47	-7.35%	-47.60%
182 – Day	22.8483%	21.2710%	-1.58	-6.90%	-40.88%

Auction results of tender 1842 showed that for the eighth consecutive time, the government met its target despite the sharp decline in yields over the past few weeks. This week, the government achieved an oversubscription rate of 40.4% as investors continue to swamp shorter-dated government papers to take advantage of the relatively higher returns on bills compared to longer-dated Treasury assets.

A total of GHS 3,895.77 million worth of bids were tendered for the 91 and 182 tenors against the government’s target amount of GHS 2,775.00 million. The government, however, accepted GHS 2,906.79 million and GHS 972.49 million worth of the bids tendered for the 91 and 182 tenors respectively.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 3,206.00 million from 91-day, 182-day, and 364-day bills.