Interest rates are expected to continue going up as investors seek to close the negative return spread.

Presently, there is a negative real return between interest rates and inflation.

Interest rates hit 33% on Friday, October 21, 2022, but the variance between the yields on Treasury bills and inflation is still wide.

The 91-day and 182-day Treasury bills went for 32.16% and 33.08% respectively last week.

This comes after the government realised ¢1.310 billion at the T-bill auction by accepting all bids tendered.

The auction marked the second successive week of under subscription as the government achieved 83.93% of its auction target. The amount raked in covered 90.54% of the T-bill refinancing obligation.

Government to raise ¢1.124 billion from T-bills this week

This week, the government will be seeking to raise ¢1.124 billion across the 91-day to 364-day bills to refinance the upcoming T-bill maturities of ¢1.003 billion.

Secondary market witnessed a total turnover of ¢3.61bn

Last week, the secondary market witnessed a total turnover of ¢3.61 billion (11.04% week-on-week).

Trading activity focused on 2022- 2025 and 2026-2029 maturities, accounting for nearly 90% of executed trades.

The August 2027 and April 2025 papers saw the most interest, with value traded of ¢407 million and ¢197 million, respectively.

Yields inched up at the front end of the yield curve, but declined at the belly and the back end.

Trading activity is expected to pick up this week, dominated by selling pressures with faint bidding interest.