Interest rate nears 30%; T-bills auction oversubscribed for 10 weeks running

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neared 30% as the government auction was oversubscribed for the 10th consecutive week.

However, the rising yields come with increased costs for the government as interest expenses may likely go up.

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Interest rates on the yield curve continued to surge as liquidity increased in the market.

However, the yields are lower than the current rate of 31.7% (July 2022).

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The rising interest rates indicate that government will spend more on interest payments for this year. Whilst the 91-day T-bill went for 27.7%, higher than the previous week's 27.3% that of the 6-month traded at 29.2%, compared with 28.7% the preceding week.

Meanwhile, the government secured ¢1.09 billion from the sale of short-term securities, about 33% oversubscription.

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Once again, ¢911.3 million was mobilised from the 91-day bill as investors were more interested in that financial instrument.

¢185.82 million was however obtained from the sale of the 182-day T-bill.

Despite improved liquidity in the money market, Ghana's interest rate remains one of the highest in .

Rising inflation, others pose upside risk to yields

Meanwhile, the rising inflation and downgrade of the country's pose an upside risk to yields.

Inflation quickened to 31.7% (+190 basis points), fueled by non-food inflation, particularly transport, utilities, and household furnishing and equipment.

Databank Research said investors would continue to hold out for higher yields to cover the inflation-induced losses.

Ghana's debt-to- is expected to exceed 81% in 2022.

Securities Bids Tendered (GH¢) Bids Accepted (GH¢) Interest rate
91 Day Bill  911.39 million  911.38 million 27.72%
182 Day Bill  185.28 million  185.28 million 29.29%
                           
       
       
Total 1.096 billion 1.096 billion  
Target 823 million
Source: Joy Business
Via: Joy News

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