Treasury Rates [June 26, 2023]

Security	Interest Rates
91 – Day Bill	22.9715%
182 – Day Bill	25.4414%
364 – Day Bill	29.2546%

The yields on the government’s short-term papers climbed up again this week to extend its upward trend for the fourteenth consecutive time as the government continues to fall on active investor participation in its shorter-dated papers to fund its maturing debt obligations. A little over GHS 2.0 billion maturing papers across the three tenors are due Monday, June 26. The government is seeking to raise over GHS 2.2 billion to meet these debt obligations and to support other government expenditures. Rates on Treasury bills are expected to see further tightening following the government’s over-reliance on its short-term instruments and as expectations of higher inflation linger on.

The 91-day bill came in as the biggest mover at last Friday’s auction with a jump of 128 basis points (bps), overshadowing last week’s 42 bps jump. It rose to 22.9715% this week from last week’s 21.6928% level.

The 182-day posted a modest gain this week, failing to repeat last week’s impressive 102 bps increase. It surged by 47 bps to clear at 25.4414% this week from last week’s 24.9747% level.

The 364-day bill moved up by 34 bps to trim its year-to-date decline from 19.45% as of last week to 18.50% this week. It rose from 28.9147% last week to clear at 29.2546% this week, its highest in four months.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	21.6928%	22.9715%	1.28	5.89%	-35.04%
182 – Day	24.9747%	25.4414%	0.47	1.87%	-29.29%
364 – Day	28.9147%	29.2546%	0.34	1.18%	-18.50%

Auction results of tender 1856 showed that after last week’s sluggish performance where demand failed to meet the government’s ambitious target, demand improved this week to beat the government’s target amount. Accordingly, the government’s target amount was oversubscribed by 4.4%.

A total of GHS 2,299.32 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 2,202.00 million. However, in an attempt to beat its interest cost down, the government accepted GHS 2,278.18 million of the total bids tendered across the three tenors.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 2,913.00 million from 91-day and 182-day bills to meet GHS 1.77 billion maturing papers due next week.