Treasury Rates [August 5, 2024]

Security	Interest Rates
91 – Day Bill	24.8247%
182 – Day Bill	26.7640%
364 – Day Bill	27.8578%

Ahead of next week’s announcement of the consumer price index for July where the rate of inflation will be expected to show another marginal decline in the inflation reading following the slower pace of depreciation recorded by the Cedi amid the relatively stable prices of petroleum products, Treasury bill rates ticked higher this week in what appears to be a turning point for Treasury yields after weeks of staying on a downward trajectory. Over the past few weeks, Treasury yields have slowed down the sharp decline observed from the start of the year supported by the disinflationary path.

The yield on the 91-day bill came in as the star performer for the week after struggling to record a change over the past two weeks. It gained by 4 basis points (bps) to clear at 24.8247% this week from 24.7879% recorded last week.

The 182-day bill rose this week by 2 bps to build on last week’s 3 bps increase. It moved up from 26.7415% cleared last week to 26.7640% this week.

After recording an impressive 5 bps increase last week, the yield on the 364-day bill was little changed this week as it moved up from 27.8562% recorded last week to 27.8578% this week.

Week-on-Week Change

Tenor	Previous	Current	w-o-w Change	w-o-w Change (%)	Year-to-Date
91 – Day	24.7879%	24.8247%	0.04	0.15%	-15.11%
182 – Day	26.7415%	26.7640%	0.02	0.08%	-16.06%
364 – Day	27.8562%	27.8578%	0.00	0.01%	-14.25%

Auction results of tender 1914 revealed that the government’s Treasury target suffered another shock, the fourth in a row, with demand coming in at 87.2% of the target as investors expressed their concerns over the increasing government borrowings.

A total of GHS 3,803.81 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 4,363.00 million. The government accepted all GHS 2,389.91 million, GHS 1,170.86 million, and GHS 243.04 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 6,557.42 million from 91-day, 182-day, and 364-day bills to meet GHS 6.17 billion worth of maturing papers due next week as well as to create buffers for the upcoming interest payments on the DDEP bonds.