Interest rates surge to 35% as government misses T-bills target marginally

Interest rates continued to surge on the money market, going beyond 35% to reflect the increased inflation rate of 40.4% in October 2022.

However, the government failed to meet the sale of the Treasury bills target marginally by 3.7%.

This is the 5th week running that the government failed to achieve its target, but based on the numbers liquidity appears to be improving.

Again, the government was seeking to refinance the upcoming T-bill maturities of ¢1.711 billion, so getting ¢1.983 billion is a good sale.

According to the auction results, most of the investors bought the 91-day T-bills as the government mobilised ¢1.82 billion.

The yield on the 3 months bill however went for 34.3%.

For the 182-day Treasury bills, the bids tendered were ¢145.69 million but government accepted ¢142.03 million. The interest rate was 35.4%.

That of the 364-day went for 35.07%. Government however accepted ¢7.86 million of the ¢10.03 million bids tendered in.

Despite a surging interest rates, there is still a negative real return between interest rates and inflation.

Securities Bids Tendered (GH¢) Bids Accepted (GH¢)
 91 Day Bill  1.827 billion  1.827 billion
182 Day Bill  142.69 million  142.03 million
 365 Day Bill  10.03 million  7.86 million
Total 1.983 billion 1.983 billion
Target 2.060 billion                 . 2.060 billion