Treasury Bill Yields to Continue Upward Trajectory as Gov’t Looks to Raise GHS 7.44 Billion this Friday
Despite a continued deceleration in inflation, Ghana’s treasury bill yields are poised to maintain their upward trajectory. The persistence of strong demand, combined with tightening market liquidity, is constraining any downward adjustment in yields.
The Monetary Policy Committee (MPC) of the Bank of Ghana is scheduled to meet this week, where it will weigh potential changes to the benchmark interest rate. Market analysts broadly expect the central bank to maintain its current policy rate, despite recent inflation declines.
Databank Research has suggested that, notwithstanding the Federal Reserve’s rate cut and a favorable domestic disinflationary trend, the MPC is likely to continue its tight monetary stance in line with International Monetary Fund (IMF) programme commitments. This strategy is aimed at tempering inflation expectations and mitigating pressure on the cedi ahead of an anticipated surge in pre-election government spending.
Yields on the 91-day, 182-day, and 364-day treasury bills edged higher last week, rising by 9, 2, and 1 basis points, respectively, to 25.01%, 26.82%, and 28.08%. However, the Treasury fell short of its auction target, securing only GH¢4.39 billion against a goal of GH¢5.88 billion, reflecting a GH¢1.49 billion shortfall.
The Treasury is now preparing to raise GH¢7.44 billion through the issuance of 91-day, 182-day, and 364-day bills this Friday, September 27, 2024. This will include covering GH¢2.99 billion in maturing securities.
