Treasury Rates [June 5, 2023]

Security	Interest Rates
91 – Day Bill	21.1578%
182 – Day Bill	23.9381%

The yields on the government’s short-term papers continued their upward trend for the eleventh consecutive time this week despite a pause in the monetary policy tightening cycle after the central bank took account of the significant drop in inflation numbers in the first four months of the year. The last monetary policy committee meeting of the central bank saw the committee adopt a wait-and-see approach following a 12.0% drop in the headline inflation with core inflation also supporting the easing pressures on consumer prices. Treasury yields have since late March continued to push higher amid tight funding options for the government to meet its maturing debt obligations and to supplement the national budget. Treasury yields are expected to harden further until such time when key macroeconomic variables have been stabilized.

The 91-day bill inched up by a higher margin this week at 36 basis points (bps) compared to last week’s 24 bps increase. It cleared at 21.1578% this week, up from 20.7996% posted last week.

The 182-day similarly recorded a higher margin of increase this week, up by 32 bps compared to last week’s 27 bps climb. It moved up from 23.6230% posted last week to clear at 23.9381 this week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	20.7996%	21.1578%	0.36	1.72%	-40.17%
182 – Day	23.6230%	23.9381%	0.32	1.33%	-33.47%

Auction results of tender 1853 revealed that after the recent struggles where the government failed to meet its targets for the second consecutive time, demand went up this week to beat the target amount as investors renewed their strong interest in the relatively high-yielding Treasury assets. The government’s short-term papers were thus oversubscribed by 15.7% this week.

A total of GHS 2,409.91 million worth of bids were tendered for the 91 and 182 tenors against the government’s target amount of GHS 2,082.00 million. The government accepted GHS 1,593.39 million out of the GHS 1,593.49 million worth of bids tendered for its 91-day paper and also accepted GHS 812.62 million out of GHS 816.42 million worth of bids tendered for its 182-day paper.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 2,631.00 million from 91-day, 182-day, and 364-day bills.