Interest rates are expected to decline steadily in the near term as yield uncertainty persists among investors.

This is coming after the yields slump to 20% due to high demand for treasury bills, forcing the Treasury to reject some bids.

Analysts believe the sharp decline in yields stems from auction capitulation, compelling investors to adjust their yield expectations amid fears of bid rejections.

They added that the ultimate yield floor will depend on money demand, MPC decisions, and the rate of inflation.

“We believe the rates on BoG’s [Bank of Ghana] bills and potential re-entry of private sector players offering competitive rates against the relatively risk-free rate will signal this floor”, Databank Research said.

Treasury bills continued their five-week decline, witnessing one of the sharpest drops in yields last week.

The yields on the 91-day, 182-day, and 364-day bills decreased by 369 basis points, 240 bps, and 46 bps, settling at 20.79%, 25.38%, and 27.30%, respectively.

Investor demand remained robust, with total bids reaching GH¢18.24 billion, significantly surpassing the GH¢6.69 billion target.

However, only GH¢7.42 billion was accepted.