GCB Capital has projected treasury bill yields to peak at about between 30% to 33.5%.

The yield on the 91-day T-bill has hit 29.81% while that of the 364-day bill reached 33.42%.

In its projection, GCB Capital said the Treasury's primary market activity will remain concentrated around the front end of the Lower Currency Yield (LCY) curve as the domestic bonds market remains shut amidst the attractive T-bill yields.

It also projects and easing of nominal yields once inflation declines sufficiently.

It noted that the fiscal adjustment measures being implemented towards restoring fiscal and debt sustainability and macroeconomic stability will further support disinflation and quicken the decline in nominal yields.

“We expect the disinflationary trend to continue and we tip the November 2023 print to come in 33%, barring any significant pass-through from cedi depreciation to inflation. Thus, real returns on T-bills could improve sufficiently, potentially limiting the upside risks to nominal yields,” it said.

From the peak of around 35.5% pre-DDEP, T-bill yields declined sharply over the three auctions that followed, with the benchmark 91-day settling at 18.52% at auction 1842 held on March 17, 2023.

However, amidst the heightened inflation risks, which resulted in pronounced negative real return, the apparent macroeconomic risks and the increased appetite for short-term funds due to limited funding options for the government reversed the sharp decline in yields thereafter.

GCB Capital noted that normal yields are near, with headline inflation which is down 16% YTD to 38.1% in Sept-23 amidst an improving outlook, we believe nominal yields are near their peak.