- March 9, 2022
- Posted by: Charles Yeboah Nixon
- Categories: Banking and Finance, Economics, Finance
Interest rates continue to rise on the money market, a move due to the challenges within the fiscal economy, the latest Treasury bills auctioning by the Bank of Ghana has revealed.
The rise in interest rates has become necessary because without that government will struggle to raise enough funds to finance short term expenditure.
In actual fact, this is the fourth week running that the yield on the Treasury securities have gone up.
The interest rate of the 91-day T-Bills recorded the biggest movement, as it went up by about 0.07% to 13.14%.
This came about because majority of the investors bought the 3 months bill.
GH¢1.074 billion was raised through the sale of the short term securities.
It was followed by the one year bill which the interest rate hit 16.95%. GH¢83.36 million was however secured from the auctioning of the financial instrument.
According to the auctioning results, government secured GH¢1.229 billion, a marginal oversubscription of 4.6%.
This was against a target of GH¢1.175 billion cedis.
It accepted all the bids tendered in by the investors.
The increase in the interest rate of the Treasury securities, many analysts, economists and market watchers have attributed it to the rising inflation and the depreciation of the cedi.
With all signal pointing to an increase in the Policy Rate of the Bank of Ghana from 14.5%, cost of borrowing is expected to shoot up further.