Treasury Rates [July 10, 2023]

Security	Interest Rates
91 – Day Bill	24.3924%
182 – Day Bill	26.0293%
364 – Day Bill	29.6488%

Ahead of the announcement of the consumer price index for June, the yields on the government’s short-dated papers extended their upward trajectory supported by the government’s over-reliance on Treasury papers to meet its debt obligations and as the prevalence of inflationary pressures drives expectations of higher inflation numbers. Inflation is due Wednesday where market anticipation is tilted towards an elevated consumer price index on the back of the Cedi’s marginal decline amid an upward review in utility tariffs.

The yield on the 91-day bill edged higher by 44 basis points (bps), slowing down from last week’s 98 bps climb. It cleared at 24.3924% this week from 23.9540% registered last week.

The rate of increase on the yield on the 182-day bill slowed further down for the third consecutive time this week as the yield on the paper rose by 23 bps compared to last week’s 36 bps jump. It moved up from 25.7968% posted last week to clear at 26.0293% this week.

The 364-day bill failed to sustain its last issuance’s big move of 140 bps gain as it went up by 39 bps this week. It cleared at 29.6488%, up from 29.2546% posted last week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	23.9540%	24.3924%	0.44	1.83%	-31.02%
182 – Day	25.7968%	26.0293%	0.23	0.90%	-27.66%
364 – Day	29.2546%	29.6488%	0.39	1.35%	-17.40%

Auction results of tender 1858 showed that investor interest in the government’s shorter-dated papers improved this week driven by expectations of a higher inflation rate despite warnings of increasing interest costs on government papers. Demand this week rose to recover from last week’s weakened performance with demand coming in excess of 30.0% of the target amount.

A total of GHS 2,068.51 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 1,575.00 million. The government accepted all GHS 297.63 million and GHS 137.89 million worth of bids tendered for its 182 and 364 tenors respectively but accepted GHS 1,544.42 million out of GHS 1,632.99 million worth of bids tendered for its 91-day bill.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 1,788.00 million from 91-day and 182-day bills to meet GHS 1.68 billion maturing papers due next week.