- June 20, 2022
- Posted by: Charles Yeboah Nixon
- Categories: Banking and Finance, Economics, Finance
Interest rates continue to surge on the money market as they surpassed 24%.
This is expected to increase interest payments as government continues to borrow at higher rate on the domestic market.
According to latest auctioning by the Bank of Ghana, interest rate on the 91-day Treasury bills shot up to 24.5%, from 23.69% the previous week.
The 182-days also went for 25.98%, from 25.4% the week before.
The rising interest which has been triggered by the increasing inflation rate appears to be frightening, as it will push cost of borrowing up and consequently increase cost of operations of businesses.
At the same time, chunk of government revenue would be used to service interest payments.
In the first quarter of this year, ¢10.6 billion was used to service debt. 82.7% constituted domestic debt.
According to the May 2022 Monetary Policy Report by the Bank of Ghana, total interest payments amounted to ¢10.608.billion over the review period, higher than the envisioned target of ¢10.037 billion.
Meanwhile, ¢1.311 billion was accrued from the sale of the 3-months bill which will mature on September 20th, 2022.
The target for the bills was ¢1.325 billion.
Many analysts and market watchers are hoping the improve liquidity will be sustained in the upcoming auctioning on Friday June 24th and subsequently.