Investments

Interest rates on T-bills, notes to stay above 14%

Interest rates on government securities will continue to remain above 14 percent for the rest of the year because of government’s appetite for borrowing.

Government exceeded its Treasury bills sale target for the fifth week running by GHs46.39 million during the last auctioning.

This was after the Bank of Ghana sold GHS1.07 billion of the short term securities [91-day and 182 day T-bills].

Senior Economic Analyst with Databank Research, Courage Martey tells Joy Business the improved liquidity on the market cannot push interest rates down.

“The over subscription or the improved liquidity on the market has not spared yields from going up. If you go towards the middle segment to the back-end of the curve also, yields have gone up across that level. What we noticed is that before July, yields were lower at the start of the year but since after July, the middle to back-end of the curve has recorded an average increase of year-to-date of 65 basis points at the middle to back-end of the curve.”

He further explained that “yields are slightly pushing up across the curve but that is because the market has seen that the government has a high borrowing requirement because of the revenue shortfalls and also higher expenditure commitment they have to embark on, largely due to covid-19 and partly to execute the agenda for the year.”

 Government public debt stock stood at about GHS263 billion as of the end of July, 2020.

Government exceeded T-bills sale by 4.5%

Government exceeded its Treasury bills sale target for the fifth week running by 4.5%.

This was after the Bank of Ghana sold GHS1.073 billion of short term securities.

Analysts attributed this to improve liquidity on the market.