The negative real returns are affecting demand for treasury bills, Joy Business can confirm from most analysts' assertions.

This is coming after investor demand for T-bills weakened last week, with total bids down 27% week-on-week to GH¢5.29 billion. The Treasury accepted GH¢4.73 billion—below maturities of GH¢6.09 billion and the GH¢6.32 billion target.

Inflation has been hovering around 22%, but yields are estimated at an average of 16%, indicating a spread of about 6%.

Databank Research believes its expectations of a demand boost following the International Monetary Fund’s positive review were tempered by reduced institutional offers amid negative real returns.

This contrasts with the strong GH¢12.44 billion uptake for the Bank of Ghana’s 56-day bill at 28%.

With the 364-day bill allocated only to non-competitive bids at sub-17%, the Treasury signalled efforts to lower near-term costs to support favourable pricing for upcoming bond issuance.

In the near term, analysts expect modest yield downticks, supported by further disinflation in April 2024’s print.

Last week, yields declined across the curve, with the 91-day, 182-day and 364-day bills falling by 9.0 basis points (bps), 26bps and 142bps week-on-week to 15.23%, 15.77% and 16.96% respectively.