Treasury Rates [January 29, 2024]

Security	Interest Rates
91 – Day Bill	28.5913%
182 – Day Bill	31.0981%
364 – Day Bill	31.7976%

Treasury bill rates extended their downward trend for the fifth consecutive time ahead of the announcement of the first monetary policy rate for the year where the market is bracing up for the first policy rate cut in more than two years. The decision to lower the prime rate will be widely based on the significant drop in the latest inflation reading after the inflation rate fell from a 2023-year high of 53.2% to close the year at 23.2%. Consequently, the drop in the rate of inflation has fueled downward pressure on the government’s shorter-dated papers in 2024. This trend is expected to persist further on the back of expectations of slowing down inflation numbers.

The 91-day bill fell by 29 basis points (bps) this week to extend its losses in the year to more than 50 bps. It weakened from 28.8845% posted last week to clear at 28.5913% this week.

The 182-day bill posted the biggest decline this week with a 30 bps dip to widen its year-to-date loss to 2.46%. It cleared at 31.0981% this week, down from 31.3956% posted last week.

The yield on the 364-day bill went down by 20 bps to build on last week’s 9 bps dip. It fell from 31.9965% posted last week to clear at 31.7976% this week.

Week-on-Week Change

Tenor	Previous	Current	w-o-w Change	w-o-w Change (%)	Year-to-Date
91 – Day	28.8845%	28.5913%	-0.29	-1.02%	-2.22%
182 – Day	31.3956%	31.0981%	-0.30	-0.95%	-2.46%
364 – Day	31.9965%	31.7976%	-0.20	-0.62%	-2.12%

Auction results of tender 1887 showed that investors renewed their confidence in the government’s securities despite the seeming decline in yields as improving macroeconomic variables boosted investor confidence. The government’s target was subsequently oversubscribed by more than 100.0%.

A total of GHS 5,606.92 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 2,532.00 million. The government accepted all GHS 1,234.63 million worth of bids tendered for its 364-day bill and accepted 96.13%, and 99.93% of the GHS 2839.66 and GHS 1,532.63 million worth of bids tendered for its 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 2,861.00 million from 91-day, 182-day, and 364-day bills to meet GHS 2.46 billion worth of maturing papers due next week.