Treasury Rates [November 27, 2023]

Security	Interest Rates
91 – Day Bill	29.8420%
182 – Day Bill	31.8753%
364 – Day Bill	33.4468%

Ahead of the announcement of the last monetary policy rate for the year where the market is bracing up for a possible policy stay or ease, Treasury yields dipped from the previous week’s levels in what appears to be the start of the much-anticipated turnaround of the interest rates on the government’s shorter-dated papers. The newly observed Treasury rate path comes on the back of the recent easing of the consumer price index with the inflation rate losing nearly 800 basis points (bps) over the past four months. It is expected that Treasury yields will undergo a further decline as the government hopes to end the year with an inflation target of 31.3%.

The 91-day bill declined 24 bps this week, the third in a row, with an accumulated loss of nearly 0.5%. It cleared at 29.4981% this week, down from 29.7427% last week.

The yield on the 182-day bill declined by 12 bps after remaining unchanged last week. It fell from 31.8764% posted last week to clear 31.7579% this week.

The 364-day bill similarly sustained its third dip in a row this week with a decrease by 21 bps to further widen its year-to-date loss to 7.41%. It plummeted to 33.2349% this week from 33.4468% last week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	29.7427%	29.4981%	-0.24	-0.82%	-16.59%
182 – Day	31.8764%	31.7579%	-0.12	-0.37%	-11.73%
364 – Day	33.4456%	33.2349%	-0.21	-0.63%	-7.41%

Auction results of tender 1878 showed that the government took advantage of the seeming decline in yields to increase its purchases of short-term domestic assets with the support of improving investor confidence after recently published economic data revealed a decline in the debt-to-GDP ratio. Accordingly, the government achieved an oversubscription rate of 39.6%.

A total of GHS 5,008.73 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 3,587.00 million. The government accepted all GHS 1,323.80 million worth of bids tendered for the 364-day bill and also accepted 99.1% & 99.7% for the GHS 3,307.88 million & GHS 377.05 million worth of bids tendered for the 91-day and 182-day bills.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 5,618.00 million from 91-day, 182-day, and 364-day bills to meet GHS 2.24 billion worth of maturing papers due next week.