Interest rates have started going up but marginally, as the challenges within the fiscal economy reflects on the monetary economy.

According to the latest auctioning results of Treasury bills by the Bank of Ghana, interest rates of the short term financial instruments went by slightly.

Despite government's position of keeping interest rates low, it has now been forced to revise its note by accepting a slightly higher yield for the short term financial instruments.

This is to help meet its target by attracting more domestic investors. 

It also suggests that the domestic market is still strong, despite the recent downgrade of Ghana’s credit worthiness by Moody’s and Fitch.

According to the auctioning results, the interest cost went up by about 0.20% for both the 91-day and 182-day T-Bills.

Government however secured a little above ¢1.511 billion, but accepted ¢1.508 billion from the sale of the T-bills.

It will be happy because it marginally overachieved its target.

Per the results, the 91-day T-Bill was the highly patronised. About ¢957 million was purchased by the investors.

However, with the rising interest rates of T-Bills, the cost of credit will soon start going up, therefore increasing the cost of doing business.

Mixed development on money market

On the money market, interest rates reflected mixed trends across the yield curve.

The 91-day and 182-day Treasury bill rates declined to 12.49% percent and 13.19% respectively in December 2021, from 14.08% and 14.13% respectively, in December 2020.

Similarly, the rate on the 364- day instrument decreased marginally to 16.46%, from 16.98% over the same comparative period.

Rates on the 2-year and 5-year bonds increased to 19.75% and 21.00% respectively, from 18.50% and 19.85% respectively, while rates on the 3-year, 6-year, 7-year and 10-year bonds broadly declined.

The rates on the 15-year and 20-year bonds, however, remained unchanged at 19.75% and 20.20% respectively, over the same comparative period.