Liquidity remains tight on domestic market, as interest rates go above 23.6%

Government continue to struggle to borrow from the domestic market, as interest rates surged further.

According to data from the Bank of Ghana, interest rates continue to soar on the yield curve, going up by a little above 1.0% to hit 23.6% plus.

The rising interest rates show that cost of credit will continue to increase in the coming days and weeks. This is due to the surging rate of inflation.

Again, interest payments are expected to go up as government borrows at a higher rate from the domestic market.

The 91-day T-bills at the last auctioning which was the most patronided, was purchased by the domestic investors at a rate of 23.69%, 1.12% higher than the previous week.

The 6-months and one-year bills also sold for interest rates of 25.4% and 26.8% respectively.

According to the auctioning results, government could not achieve one hundred percent sale of the short term financial instruments, as liquidity remained tight on the financial market.

About ¢1.19 billion was secured from the sale of the short term instruments.

Indeed, the target was estimated at ¢1.41 billion.