Treasury Rates [May 29, 2023]

Security	Interest Rates
91 – Day Bill	20.7996%
182 – Day Bill	23.6230%
364 – Day Bill	28.0171%

Treasury bills rates extended their upward trajectory for the tenth consecutive time amidst a monetary policy rate stay last week where the central bank after a series of policy hikes adopted a wait-and-see approach on account of the significant decline in headline inflation this year. The central bank noted that the percentage of items in the inflation basket with inflation of more than 50.0% is receding, giving an indication of a strong return to the disinflation path. The yields on the government’s short-term papers are expected to continue to see some marginal increases in the near term as domestic borrowing persists as a major source of funding for government expenditures.

The yield on the 91-day bill climbed up strongly this week by twice as much as the gain recorded last week. It climbed up by 24 basis points (bps) to clear at 20.7996% this week, from 20.5623% recorded last week.

The 182-day bill moved up by 27 bps this week to send its accumulated gains over the past few months to 235 bps. It rose from 23.3553% posted last week to clear at 23.6230% this week.

The 364-day bill came in as the star performer this week, inching up by 43 bps to lower its year-to-date declines to 21.95%. It cleared at 28.0171% this week, up from 27.5910% posted last week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	20.5623%	20.7996%	0.24	1.15%	-41.18%
182 – Day	23.3553%	23.6230%	0.27	1.15%	-34.34%
364 – Day	27.5910%	28.0171%	0.43	1.54%	-21.95%

Auction results of tender 1852 showed that again the government narrowly missed its intended target as the government continued to increase its domestic borrowings to meet overdue matured debt obligations. Total subscriptions came in at 92.8% of the target amount, worse than last week’s 99.85% under subscription.

A total of GHS 3,183.54 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 3,431.00 million. The government accepted a significant number of the bids tendered at GHS 3,183.51 million.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 2,082.00 million from 91-day and 182-day bills.