Treasury Rates [October 2, 2023]

Security	Interest Rates
91 – Day Bill	28.7957%
182 – Day Bill	30.9168%
364 – Day Bill	32.8219%

Treasury bill rates continued their upward trajectory as they further inched towards 2023-year highs seen in the first quarter of the year before the drastic and sharp decline in the yields on the government’s short-term assets. The steady rise in Treasury yields comes despite a recent surprising decline in the inflation rate which fell to its lowest in nearly twelve months as a relatively stable Cedi calmed pressures on consumer prices. It is expected that as the domestic Treasury market serves as a crucial avenue for the government to fund its debt obligations and to support the national budget, rates will further extend their increasing trend.

The 91-day bill rose by 29 basis points (bps) to build on last week’s 38 bps gain as it recorded its twenty-eighth consecutive increase. It cleared at 28.7957%, up from 28.5042% last week.

After registering an impressive 129 bps increase last week, the yield on the 182-day bill came in with a much calmer increase this week at 24 bps jump. It moved up from 30.6791% last week to clear at 30.9168% this week.

The yield on the 364-day bill saw a 32 bps increase to firm its year-to-date decline in the single digits at 8.56% this week. It cleared at 32.8219% this week from 32.5061% posted last week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	28.5042%	28.7957%	0.29	1.02%	-18.57%
182 – Day	30.6791%	30.9168%	0.24	0.77%	-14.07%
364 – Day	32.5061%	32.8219%	0.32	0.97%	-8.56%

Auction results of tender 1870 showed that demand failed to meet the government’s target as investors remained cautious of the possibility of slowing price pressures coupled with renewed fears of rising public debt. The government’s target was thus undersubscribed by a little over 2.5%.

A total of GHS 2,499.88 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 2,570.00 million. The suppressed demand in this week’s Treasury performance subsequently pushed the government to accept all bids tendered.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 2,109.00 million from 91-day, 182-day, and 364-day bills to meet GHS 2.00 billion worth of maturing papers due next week.