Treasury Rates [July 24, 2023]

Security	Interest Rates
91 – Day Bill	24.9211%
182 – Day Bill	26.8064%
364 – Day Bill	30.0453%

Treasury bills rates cleared higher this week ahead of the announcement of a key monetary policy decision where the market is bracing up for a potential policy hike after inflation surged two consecutive times since the last policy meeting in May. The yields on the government’s short-dated papers continue to trend upward despite the ongoing debt restructuring in which the government is seeking to reduce its interest burden and extend maturities on existing longer-dated papers. The recent climb in Treasury rates comes on the back of expectations of higher inflation numbers and as Treasury securities remain a crucial funding alternative for the government to meet its impending obligations.

The yield on the 91-day bill went up by 23 basis points (bps) this week, the fourth successive slower growth. It moved up from 24.6865% posted last week to clear at 24.9211% this week.

The 182-day bill cleared by a higher margin this week at 40 bps compared to last week’s 38 bps gain. It cleared at 26.8064% this week, up from 26.4082% posted last week.

The 364-day bill registered an uptick of 40 bps from the previous issuance’s level to trim its year-to-date decline to 16.30%. It rose from 29.6488% at its last issuance date to clear at 30.0453% this week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	24.6865%	24.9211%	0.23	0.95%	-29.53%
182 – Day	26.4082%	26.8064%	0.40	1.51%	-25.50%
364 – Day	29.6488%	30.0453%	0.40	1.34%	-16.30%

Auction results of tender 1860 showed that the government met its target amount for the third consecutive time this week as yields continue to improve on the back of the renewed price pressures on consumer goods and services.  The government achieved an oversubscription rate of 1.7%.

A total of GHS 2,699.38 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 2,654.00 million. The government however accepted GHS 2,699.05 million worth of the 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 2,282.00 million from 91-day, 182-day, and 364-day bills to meet GHS 2.02 billion maturing papers due next week.