Treasury Rates [May 13, 2024]

Security	Interest Rates
91 – Day Bill	25.1998%
182 – Day Bill	26.9995%
364 – Day Bill	27.9999%

The recently announced drop in the inflation reading for April supported the sustained downward trend of Treasury yields as rates cleared lower this week with the yields on the 91-day and 182-day bills falling at a much faster pace this week compared to last week’s rate of decline. The inflation print for April showed a marginal drop in the year-on-year inflation rate fueled by a decline in the inflation rate for food items which fell to its lowest in two years. The monthly inflation reading, however, confirmed the prevalence of upward inflationary pressures which is expected to slow the pace of the decline in yields.

The 91-day bill fell by 25 basis points (bps), its steepest decline in six weeks, compared to last week’s 10 bps drop. It moved down from 25.4481% posted last week to clear at 25.1998% this week.

The yield on the 182-day bill came in with a 40 bps dip this week, its sharpest fall in nearly two months. It cleared at 26.9995% this week down from 27.3974% posted last week.

The 364-day bill remained relatively unchanged this week, having shed 25 bps last week. It moved slight up from 27.9998% last week to 27.9999% this week.

Week-on-Week Change

Tenor	Previous	Current	w-o-w Change	w-o-w Change (%)	Year-to-Date
91 – Day	25.4481%	25.1998%	-0.25	-0.98%	-13.82%
182 – Day	27.3974%	26.9995%	-0.40	-1.45%	-15.32%
364 – Day	27.9998%	27.9999%	0.00	0.00%	-13.81%

Auction results of tender 1902 revealed that the recent drop in the inflation reading had minimal impact on investors’ appetite for the government’s short-term assets as they rather focused on rising expectations of upward inflation numbers in the near term. Accordingly, the government’s target amount was oversubscribed by 33.83%.

A total of GHS 4,920.90 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 3,677.00 million. The government accepted all GHS 3,825.89 million, GHS 822.39 million, and GHS 272.62 million worth of bids tendered for the 91-day, 182-day, and 364-day bills respectively.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 3,187.00 million from 91-day, 182-day, and 364-day bills to meet GHS 3.00 billion worth of maturing papers due next week.