Investors are still demanding more interest rate on short-term government treasuries as yield continues to hover around 14.08%.

Although there are signs of reduce inflation rate, as well as a relative stability in the exchange rate, investors appear to be demanding more for investments in short-term government securities.

This may indicate some risk factors, which may be due to the slow fiscal consolidation process, complicated by the Covid-19 pandemic.

Results of Treasury bills auction last Friday revealed that investors are still demanding an extra return on their investments.

The demand for more yield began in the month of August this year when investors [banks] were largely moving towards the Bank of Ghana (BoG) bills and the COCOBOD Bills – which are offering slightly higher yields [14.50%] than the government treasuries.

But the additional interest rate on government securities is quiet marginal, which shouldn’t be much of a cause to worry.

Data from the Bank of Ghana indicates that government treasury securities were being priced at a rate of about 13.97% in the greater part of the second quarter of this year.

But, this has consistently increased to 14.06% by the end of August this year.

Meanwhile, BoG mobilised ¢1.02 billion for government from both the sale of the 91-day and 182-Day Treasury bills.

It is hoping to raise ¢1 billion for government in the next auction, on Friday, September 18.