Interest rates continue to surge on the domestic market as challenges within the fiscal economy lingers on.

According to the auctioning results of the weekly Treasury bills by the Bank of Ghana, interest rates of the short term financial instruments went up marginally by 0.03% on the 91-day and 182-day T-Bills.

Whilst, the 91-days Treasury bill went for 12.91%, the 6-months bill was priced at 13.29%.

The rising interest rates has become necessary because that is the only way government can secure adequate funds to finance its short term projects.

Though government has expressed its commitment to keep yields low, the struggling fiscal economy has compelled it to up its rate to attract the domestic investors.

However, this will trigger increase in cost of borrowing as the banks will have no option to adjust their lending rates up.

But the troubling situation is the ‘crowding out effect’ which keeps worsening.

According to the auctioning results government achieved an oversubscription of 24% of the weekly sale of the short terms instruments, but at a reduced target.

Government had targeted ¢664 million, but got a little above ¢827 million. It however accepted all the bids of ¢827 million.