Treasury Rates [December 18, 2023]

Security	Interest Rates
91 – Day Bill	29.0494%
182 – Day Bill	31.1373%
364 – Day Bill	32.4921%

The sharp loosening in the latest inflation figure for November fueled a downward pressure on the yields on the government’s shorter-dated papers as rates fell abruptly, erasing sections of previous recoveries. The latest inflation numbers released by the Ghana Statistical Service revealed that despite a jump in the month-on-month inflation figure from 0.6% in October to 1.5% in November, the national annual rate of inflation took a nosedive from 35.2% in October 2023 to print at its lowest in nearly two years at 26.4%. While this is in line with the government’s hopes of achieving an end-of-year inflation target of 31.3%, this is expected to heap downward pressure on Treasury yields in the medium term.

The yield on the 91-day bill fell by 53 basis points (bps), overshadowing last week’s 2 bps marginal gain. It declined from 29.5835% recorded last week to clear at 29.0494% this week.

The 182-day bill similarly failed to build on last week’s gain as it softened by 83 bps this week. It cleared at 31.1373% this week, down from 31.9696% posted last week.

The yield on the 364-day bill fell the most by 97 bps to further widen its contracting year-to-date depreciation to 9.48% from 6.79% last week. It cleared at 32.4921% from 33.4585% recorded last week.

Week-on-Week Change

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	29.5835%	29.0494%	-0.53	-1.81%	-17.85%
182 – Day	31.9696%	31.1373%	-0.83	-2.60%	-13.46%
364 – Day	33.4585%	32.4921%	-0.97	-2.89%	-9.48%

Auction results of tender 1881 revealed that despite the drop in rates, investors remained bullish towards the government’s short-term papers as they interpreted the recent string of economic variables as pointing in the right direction. The government’s target amount was subsequently oversubscribed by 18.6%, better than last week’s 5.3% oversubscription rate.

A total of GHS 4,726.53 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 3,984.00 million. The government accepted all GHS 3,150.04 million and GHS 782.05 million worth of bids tendered for its 91-day and 182-day bills and accepted 99.6% out of the GHS 791.75 million worth of bids tendered for the 364-day bill.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 2,594.00 million from 91-day, 182-day, and 364-day bills to meet GHS 2.4 billion worth of maturing papers due next week.