Treasury Rates for August 17th 2020

Security	Interest Rates
91 – Day Bill	14.0045 %
182 – Day Bill	14.1117 %
364 – Day Bill	16.8345 %
7 – Year Fixed Rate Bond	20.0000 %

This week, the yields on the government’s 91-day and 182-day bills rose from previous week’s levels in line with the rise in the consumer price index. Data released by the Ghana Statistical Service indicated that after a brief decline last month, the rate of inflation in July climbed to a more than a 2-year high buoyed by increases in transport fares and petroleum products.

After posting a marginal decline last week, the 91-day bill recovered this week as it strengthened by 2 basis points (bps). It rose from 13.9866% posted last week to 14.0046% this week, as it touched the 14.0% level for the first time in 2 months.

The yield on the 182-day bill gained 3 bps this week to further build on previous week’s 3 bps gain. It rose from 14.0780% posted last week to 14.1117% this week, its highest in 2 months.

The 364-day bill failed to add onto previous week’s 12 bps gain as it declined by 11 bps this week. It dipped to 16.8346% this week from 16.9433% posted last week.

Week-on-Week Changes for 17^th August, 2020

	10-Aug-20	17-Aug-20	CHANGE	PERCENTAGE CHANGE
91 – Day	13.9866%	14.0046%	0.0180	0.1287%
182 – Day	14.0780%	14.1117%	0.0337	0.2394%

Auction results from Bank of Ghana (BoG) tender 1707 further showed that demand for the government’s short-term assets slowed this week despite expectations that higher consumer prices will drive Treasury rates upwards.

A total of GHC 802.67 million bids were tendered for the 91-day, 182-day, and 364-day bills, against the government’s target amount of GHC 1,025.00 million. The government subsequently accepted all bids tendered.

The government also issued a 7-year fixed-rate bond in which it sought to raise GHC 1,000.00 million from the domestic market. Despite the sharp rise in the yield on the 7-year paper from 16.2500% at its last issuance date in April, 2018 to 20.0000%, demand was sluggish as a total of GHC 590.33 million bids were tendered and accepted.

Next week, the government is expected to increase its intended target amount to raise a total amount of GHC 1,137.00 million from 91-day and 182-day bills.