Treasury Rates [August 21, 2023]

Security	Interest Rates
91 – Day Bill	26.7073%
182 – Day Bill	27.8807%
364 – Day Bill	31.0828%

Desperate attempts by the government to create adequate buffers ahead of the first interest payment on its Domestic Debt Exchange Programme (DDEP) bonds due later this week pushed Treasury yields further upwards as the domestic market continued to serve as a key funding option for the government to meet its maturing debt obligations as well as to support the national budget. Treasury yields accordingly rose from the previous week’s levels buoyed by the government’s over-reliance on the Treasury market amidst a high inflationary environment.

The 91-day bill posted its biggest weekly change in nearly two months, coming in with a jump of 62 basis points (bps) compared to last week’s 52 bps increase. It rose from 26.0918% posted last week to clear at 26.7073% this week.

The yield on the 182-day bill climbed up for the twenty-second consecutive time this week to trim its year-to-date decline from 23.30% to 22.51% this week. It cleared at 27.8807% this week from 27.5975% posted last week.

The yield on the 364-day bill similarly pushed up from last week’s level with an increase of 38 bps this week. It moved up from 30.6998% posted last week to clear at 31.0828% this week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	26.0918%	26.7073%	0.62	2.36%	-24.48%
182 – Day	27.5975%	27.8807%	0.28	1.03%	-22.51%
364 – Day	30.6998%	31.0828%	0.38	1.25%	-13.40%

Auction results of tender 1864 showed that demand failed to match up to the government’s overambitious target. The target amount was thus undersubscribed by 12.9%.

A total of GHS 3,453.63 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 3,966.00 million. The government, constrained by tight funding options 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 3,053.00 million from 91-day, 182-day, and 364-day bills to meet GHS 2.76 billion maturing papers due next week.