Interest rates have fallen by almost 1.0% in the last two weeks, signaling ease in cost of loans.

This confirms Joy Business expectations that interest rates will go down due to the lower and stable inflation for now.

Treasury bill rates have been falling in the last couple of weeks with the 91-day T-Bills going down by about 0.89%. 

The 3 months T-Bill is one of the four key determinants, alongside inflation and Non-Performing Loans that banks prioritise in lending to consumers.  Therefore, a decline in the yield of the short term securities will translate into a fall in lending rates, despite the Policy Rate of the Bank of Ghana being maintained at 14.5%.

This is so because banks will no longer concentrate most of their investments in T-Bills, knowing that the rates are no longer too attractive. That will ultimately free some space for lending to the private sector to get some additional income.

The fall in interest rates will also come as a huge benefit to household, commercial and corporate consumers whose cost of repaying loans might ease albeit marginally.

Many market analysts in November last year expressed sentiments about the need for interest rates to trickle down.

According to them, the reduction in the general price levels of goods and services over a period should reinforce the government’s desire to push interest rates down.

This is also part of measures to reduce the domestic cost of borrowing in the midst of financing needs triggered by the coronavirus pandemic.

Government accepts all T-Bills sale worth GH¢1.32bn

Government accepted all Treasury bills sale to the tune of GH¢1.327 billion in the last auctioning despite it being oversubscribed by 9.4%.

Accepting all the bids tendered, indicates, that government is really in dire need of funds to finance the budget due to the impact of the coronavirus pandemic on the economy.

For the 91-day T-Bill, the government got a little above GH¢1.1 billion worth of bids. It also accepted about GH¢121 million cedis for the 6-months bill and GH¢102 million for the one year bill respectively.