Interest rates

Interest rates begin to rise; Sale of treasury bills oversubscribed by 7%

Interest rates have started to rise, but only marginally, as challenges in the fiscal economy trickle down to the monetary economy.

According to the latest treasury bill auction results from the Bank of Ghana, interest rates on short-term financial instruments have increased slightly.

Despite the government’s stance to keep interest rates low, it has now been forced to revise its rating by accepting a slightly higher yield for short-term financial instruments.

This is to help achieve its goal by attracting more domestic investors.

It also suggests that the domestic market is still strong, despite Ghana’s recent credit downgrade by Moody’s and Fitch.

According to auction results, interest charges increased by about 0.20% for 91-day and 182-day Treasury bills.

The government, however, got just over ¢1.511 billion, but accepted ¢1.508 billion from the sale of the treasury bills.

He will be happy because he slightly exceeded his goal.

According to the results, the 91-day T-Bill was the most frequented. About ¢957 million was purchased by investors.

However, with rising treasury bill interest rates, the cost of credit will soon start to rise, thereby increasing the cost of doing business.

Mixed developments in the money market

On the money market, interest rates showed contrasting trends across the entire yield curve.

The 91-day and 182-day Treasury bill rates fell to 12.49% and 13.19% respectively in December 2021, from 14.08% and 14.13% respectively in December 2020.

Similarly, the rate on the 364-day instrument decreased slightly to 16.46% from 16.98% in the same comparative period.

2-year and 5-year bond rates increased to 19.75% and 21.00% respectively, from 18.50% and 19.85% respectively, while 3-year, 6-year, 7-year bond rates years and 10 years fell overall. .

However, the rates for 15-year and 20-year bonds remained unchanged at 19.75% and 20.20% respectively, during the same comparative period.