Treasury Bill yields set to rise despite easing inflation
The upward trajectory of treasury bill yields is anticipated to persist, even as inflation has eased for the fifth consecutive month. Strong demand combined with tighter market liquidity is complicating efforts to lower yields.
The Monetary Policy Committee (MPC) of the Bank of Ghana is scheduled to convene this week to discuss potential adjustments to the benchmark interest rate. Most analysts predict that the policy rate will remain unchanged, despite the recent decline in inflation levels.
“Despite the Federal Reserve’s recent rate cut and the ongoing disinflation trend, we expect the MPC to maintain a tight monetary stance in alignment with the International Monetary Fund (IMF) program parameters. This approach aims to control inflation expectations amid election-induced spending, while also adopting forward guidance to mitigate pressures on the cedi’s depreciation,” stated Databank Research.
In the latest updates, yields for the 91-day, 182-day, and 364-day treasury bills increased by 9.0 basis points, 2.0 basis points, and 1.0 basis points, respectively, reaching week-on-week rates of 25.01%, 26.82%, and 28.08%. However, the Treasury fell short of its auction target of GH¢5.88 billion, managing to raise only GH¢4.39 billion, resulting in a shortfall of GH¢1.49 billion. Looking ahead, the Treasury plans to raise GH¢7.44 billion through the issuance of 91-day, 182-day, and 364-day treasury bills on Friday, September 27, 2024, to cover GH¢2.99 billion in maturing bills.
