Treasury Rates [June 3, 2024]

Security	Interest Rates
91 – Day Bill	25.0385%
182 – Day Bill	26.9173%
364 – Day Bill	27.9093%

The yields on the government’s short-term instruments resumed their downward trajectory albeit at a much slower pace after posting a relatively stable performance last week. This week’s Treasury performance comes after a monetary policy stay last week where the central bank based its decision on the latest inflationary forecast which has revealed a slightly elevated inflation profile on account of the recent exchange rate pressures and adjustments in transportation fares. Treasury yields are expected to continue to post minimal declines in the near term on the back of the prevalence of upward inflation pressures.

The 91-day bill after posting some marginal increase last week failed to maintain the momentum as it fell by 6 basis points (bps) this week. It cleared at 25.0385% this week from 25.0992% posted last week.

The yield on the 182-day posted the least decline this week at 3 bps after last week’s marginal dip. It moved down from 26.9496% posted last week to clear at 26.9173% this week.

The 364-day bill went down by 4 bps to widen its year-to-date dip to 14.09% from 13.96% posted last week. It fell from 27.9498% registered last week to clear at 27.9093% this week.

Week-on-Week Change

Tenor	Previous	Current	w-o-w Change	w-o-w Change (%)	Year-to-Date
91 – Day	25.0992%	25.0385%	-0.06	-0.24%	-14.37%
182 – Day	26.9496%	26.9173%	-0.03	-0.12%	-15.57%
364 – Day	27.9498%	27.9093%	-0.04	-0.14%	-14.09%

Auction results of tender 1905 showed that demand picked up steam this week as threats to the inflation outlook escalated. The government subsequently recovered from its 15.41% undersubscription last week to achieve an oversubscription of nearly 30.0% this week.

A total of GHS 3,525.56 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 2,718.00 million. The government accepted all GHS 608.41 million and GHS 201.49 million worth of bids tendered for the 182-day and 364-day bills respectively but accepted 99.8% out of the GHS 2,715.66 million worth of bids tendered for the 91-day bill.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 4,400.00 million from 91-day, 182-day, and 364-day bills to meet GHS 4,140.00 million worth of maturing papers due next week.