Treasury Rates [May 15, 2023]

Security	Interest Rates
91 – Day Bill	20.4309%
182 – Day Bill	22.9615%
364 – Day Bill	27.5910%

Short-term Treasury yields continued its steady rise for the eighth consecutive time this week despite a persistent slowdown in the year-on-year inflation rate with the latest inflation announcement showing that the inflation rate fell to its lowest in six months at 41.2% in April. The drop in the inflation reading came largely on the back of slower price increases among items in the non-food inflation basket as stability in Transport fares culminated in smaller increases in most items. It is expected that Treasury yields will witness additional increases as domestic borrowing from the Treasury market forms a key funding option for the government ahead of the disbursement of the first tranche of support from the IMF.

The yield on the 91-day bill moderated this week compared to last week’s 31 basis points (bps) increase. It went up by 17 bps this week to clear at 20.4309% from 20.2581% posted last week.

The 182-day bill rose by 13 bps this week to build on last week’s 12 bps gain. It moved up from 22.8294% posted last week to clear at 22.9615% this week.

The 364-day bill jumped up by 23 bps, more than doubling last week’s 10 bps increase. It rose from 27.3617% posted last week to clear at 27.5910% this week.

Week-on-Week Changes

Tenor	Previous	Current	w-o-w Change	w-o-w % Change	Year-to-Date
91 – Day	20.2581%	20.4309%	0.17	0.85%	-42.23%
182 – Day	22.8294%	22.9615%	0.13	0.58%	-36.18%
364 – Day	27.3617%	27.5910%	0.23	0.84%	-23.13%

Auction results of tender 1849 revealed that after a streak of oversubscriptions, demand weakened this week failing to beat the government’s overambitious target as the market continue to remain cautious of the government’s continuous reliance on domestic borrowing. The government’s target was thus undersubscribed by 16.5%, the first in seven weeks.

A total of GHS 2,782.44 million worth of bids were tendered for the 91, 182, and 364 tenors against the government’s target amount of GHS 3,333.00 million. The government accepted all bids tendered for its 182 and 364 tenors and nearly 100% of bids tendered for the 91-day bill, all totaling GHS 2,781.38 million.

In the week ahead, we expect the government to return to the domestic market in an attempt to mobilize GHS 2,732.00 million from 91-day and 182-day bills.