Interest rates continue to surge ahead of the expected hike in the policy rate of the Bank of Ghana from the current 17%.

This is expected to increase the cost of doing business in the country further, due to the rising cost of credit.  

With inflation above 23%, it is expected that the managers of the monetary economy will increase the policy rate to reduce money supply and as a result slowdown the rising prices of goods and services.

Interest rates on the short term financial instruments have been going up every week to make up for the liquidity shortfall and the under-subscription of Treasury bills sale so far this year.

They are expected to go beyond 23% anytime soon.

In the just ended T-bills auctioning, the 91-day and 182-day Treasury bills went up by 0.42% respectively to 18.22% and 19.26%. The one-year bill also increased by 1.07% percent to 21.72% to entice investors.

Nevertheless, the sale of Treasury bills by government once again failed to meet its target.

The shortfall was a little above ¢712 million, approximately 37% undersubscribed.

Chunk of the short term instruments purchased was the 91-day T-bills in which ¢1.031 billion was bought by the investors, largely commercial banks.

SecuritiesBids Tendered (GH¢)Bids Accepted (GH¢)Interest rate
91 Day Bill1.031billion 1.031billion18.226%
182 Day Bill128.47 million 128.47 million19.262%
364 Day Bill 88.81 million  88.81 million              21.272%
Total1.248 billion 1.248 billion 
Target1.961 billion