Upcoming auctions for Treasury bills may clear above the 32% rate as investors demand a higher risk premium.
Many analysts believe T-bill yields are likely to continue on their upward trajectory as investors re-price their assets due to higher inflation.
Inflation shot up to 33.9% in August 2022, fueled by non-food inflation, which went up by 33.36% (+2.3%).
According to the Weekly Fixed Income Update by Databank Research, domestic investors continue to hold short-term views on the bonds market amidst heightened inflation, focusing on the 2022- 2025 tenors.
The last bond offering sold at 29.50% in July 2022.
The government sells ¢1.92bn worth of Treasury securities
Last week, the Treasury raked in ¢1.92 billion from the T-bill auction out of ¢1.94 billion worth of tendered bids. This represented 98.90% of total bids.
The accepted bids exceeded the refinancing obligation by 19.90% and the auction target by 11.64%.
The 91-day bill went for 29.91%, whilst the 182-day bill cleared at 31.14%.
Government to sell ¢ 1.33bn in T-bills
This week, the government is expected to sell ¢1.33 billion across the 91-day to 182-day bills to refinance total maturities worth ¢1.24 billion.