Treasury Rates [May 8, 2023]

Security	Interest Rates
91 – Day Bill	20.2581%
182 – Day Bill	22.8294%
364 – Day Bill	27.3617%

Treasury bill rates rose for the seventh consecutive time this week in what appears to be a desperate attempt by the Government to keep hold of its crucial source of non-tax funding for various fiscal expenditures amidst a slowing down inflation trend. Inflation for April is expected this week with analysts anticipating the rate of inflation to hover between 40.0% and 46.0% on the back of the relative stability in the local currency and steady fuel price. As short-term government securities remain a key source of funding for government spending, Treasury yields are expected to continue to see some upward trend in the near term.

The 91-day bill posted its biggest gain in four weeks this week, coming in with a jump of 31 basis points (bps). It cleared at 20.2581% this week from 19.9474% recorded last week.

The 182-day bill rose by a similar margin seen last week with a 12 bps increase this week. It climbed up to 22.8294% this week from 22.7106% posted last week.

The 364-day bill went up by 10 bps, slowing down from 36 bps increase at its last issuance. It moved up from 27.2615% posted last week to clear at 27.3617% this week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	19.9474%	20.2581%	0.31	1.56%	-42.71%
182 – Day	22.7106%	22.8294%	0.12	0.52%	-36.55%
364 – Day	27.2615%	27.3617%	0.10	0.37%	-23.77%

Auction results of tender 1849 showed that investors continued to throng on the government’s assets as investors perceived Treasury securities to be comparatively more rewarding. The government thus achieved its sixth consecutive oversubscription with bids tendered coming in excess of 40.2% of the target amount.

A total of GHS 2,567.81 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 1,834.00 million. The government subsequently accepted all bids tendered.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 3,333.00 million from 91-day, 182-day, and 364-day bills.