Soaring inflation rates and escalating benchmark rates in Africa has prompted central banks across the continent to issue treasury bills at rates closely mirroring these benchmarks.
Data tracking from Nairametrics displays a positive correlation between benchmark interest rates and 91-day treasury bills for many African countries. As the monetary authorities in these countries try to maintain market stability by providing clarity to investors.
For example, Egypt with an MPR of 27.25% currently has a yield rate of 27.208% on its 91-day treasury bills. Ghana with an MPR of 29.00% has a yield of 24.18% on its 91-day treasury bills.
Temitope Ejide, a Senior Fixed Income Analyst with Bloomberg noted,
“It makes sense that these countries are trying to make their T-bill issuances attractive from a yield perspective, because firstly, they need to raise capital to meet obligations. Budget deficits from a fiscal perspective continue to widen for most developing countries.”
According to Moody’s Analytics, average yields for US T-bills were put at 5.25%, Canadian T-bills had average yields of 4.89%, German T-bills yields were put at 3.48%, and Indian T-bills, 7.03%.
However, for African countries, the case was different, Nigeria had a yield rate of 16.24% on its 91-day T-bill, and Kenya had a yield rate of 15.73% on its 91-day bills.
Top 10 T-bill yields in Africa (91-day)