Treasury Rates [March 27 2023]

 

Security	Interest Rates
91 – Day Bill	18.8785%
182 – Day Bill	21.4392%
364 – Day Bill	25.6637%

Treasury bills rates were mixed this week, giving a reflection of how divided the market is ahead of a crucial monetary policy rate announcement where analysts are divided over the direction of interest rates. Although the rate of inflation has seen some decline over the first two months, the rate remains at stubbornly high levels, prompting some analysts to call for a wait-and-see approach. Others also assert that expectations of lower inflation coupled with the progress made in Ghana’s quest to secure an IMF bailout package calls for a policy ease.

The 91-day bill registered its first week-on-week gain in nearly two months this week as it went up by 35 basis points (bps) to recover part of last week’s 147 bps dip. It cleared at 18.8785% this week from 18.8589% recorded last week.

The yield on the 182-day went up by 17 bps this week to trim part of its earlier losses. It moved up from 21.2710% posted last week to clear at 21.4392% this week.

The 364-day bill was the lone decliner at last Friday’s auction, as it went down by 116 bps to extend its losses in 2023 to 10.23 percentage points. It cleared at 25.6637% this week, from 26.8239% 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	18.5289%	18.8785%	0.35	1.89%	-46.62%
182 – Day	21.2710%	21.4392%	0.17	0.79%	-40.41%
364 – Day	26.8239%	25.6637%	-1.16	-4.33%	-28.50%

 

Auction results of tender 1843 showed that for the first time in two months, the government failed to realize its intended target amount as investors begin to worry over the pace of interest rate decline without a corresponding drop in inflation. Consequently, the target amount was undersubscribed by 23.8%.

A total of GHS 2,441.89 million worth of bids were tendered for the 91, 182, 364 tenors against the government’s ambitious target amount of 3,206.00 million. The government was thus forced to accept all bids tendered bids.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 1,338.00 million from 91-day and 182-day bills.