Security | Interest Rates |
91 – Day Bill | 24.6865% |
182 – Day Bill | 26.4082% |
Treasury bill rates extended their upward trajectory supported by expectations of higher inflation numbers and as investors continue to swarm to Treasury securities to take advantage of the increasing returns on the government’s shorter-dated papers. Inflation results released last week were largely in line with market expectations as the inflation rate rose marginally to close the first of the year at 42.5%, having risen steadily from a 2023 mid-year low of 41.2% in April. The pickup in the inflation rate came largely on the back of the recent upward adjustment in utility tariffs coupled with the Cedi’s woes which added to pressures on the prices of food items. Treasury yields are expected to continue to see further upward trends as other sources of funding for government spending remain shut.
The yield on the 91-day bill went up this week by 29 basis points (bps), its third successive slower growth. It cleared at 24.6865% this week, up from 24.3924% posted last week.
The 182-day bill posted a relatively larger margin of increase at 38 bps compared to last week’s 23 bps jump. It moved up from 26.0293% recorded last week to clear at 26.4082% this week.
Week-on-Week Changes
Tenor | Previous | Current | w-o-w Change | w-o-w % Change | Year-to-Date |
91 – Day | 24.3924% | 24.6865% | 0.29 | 1.21% | -30.19% |
182 – Day | 26.0293% | 26.4082% | 0.38 | 1.46% | -26.60% |
Auction results of tender 1859 held last Friday revealed growing strong interest in the government’s shorter-dated papers by investors as yields rise steadily to trim declines in real returns. The government’s target amount was thus oversubscribed by 19.5% this week, failing to beat last week’s 30.0% oversubscription rate.
A total of GHS 2,126.22 million worth of bids were tendered for the 91 and 182 tenors against the government’s target amount of GHS 1,778.00 million. The government, constrained by limited funding alternatives, 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 2,664.00 million from 91-day, 182-day, and 364-day bills to meet GHS 2.50 billion maturing papers due next week.