Interest rates in Ghana have dropped by a significant 15.1%, the highest decline in Africa since January 2023.

Yields on the money market were as high as 35% at the beginning of the year, but the government was compelled to cut interest rates to reduce the cost of borrowing drastically.

This is the sharpest decline in Sub-Sahara Africa in 2023.  

For the 91-day Treasury bill, the yield has dropped by 15.11% to 20.26%. That of the 182-day T-bill has also seen a sharp decline by 13.15% to 22.83%.

But the yields in Ghana are still among the highest on the continent. Egypt is one of the few countries in Africa with yields higher than Ghana.

Meanwhile, Analysts are optimistic the $710 million in loans approved by parliament will likely slow down the rise in yields on the money market.

The Parliament of Ghana last week approved seven loans, totaling $710 million, to support critical sectors of the economy. The loans are expected to finance various government initiatives as well as facilitate the government’s bid to secure an IMF board agreement.

At the last auction on Friday, May 5, 2023, the T-bills sale was oversubscribed, as the treasury raised ¢2.57 billion, exceeding the gross target by 40.01%.

According to the auction by the Bank of Ghana, the government accepted a significant ¢2.56 billion from the bids submitted by the investors, largely the banks.

Yet again, the majority of the bids came from the 91-day T-bills as ¢1.62 billion were tendered. All the bids were consequently accepted.

Also, almost all the ¢380.75 million of bids submitted for the 182-day T-bills were accepted.