Interest rates rose on the treasury market for the 4th week running, as government pushed for more funds to finance its short-term liabilities.

According to the latest auction by the Bank of Ghana, the rates went up across the yield curve.

Whilst the 91-day T-bill shot up by 0.07% to 19.96%, that of the 182-day bill increased by 0.10% to 22.57%.

The one-year (364-day) bill also went up to 27.26%, from 26.90% the previous week.

Some analysts are worried that the rising interest rates may affect the government quest to reduce the deficit financing in 2023 and the next couple of years. This is because government will continue to pay more interest on these debt instruments.

Nevertheless, the Bank of Ghana’s policy rate and inflation still remain high, and as such some market watchers believe the treasury rates do not align with the prevailing economic condition.

Meanwhile, the government secured ¢2.53 billion from the sale of the short term instruments, approximately 29.6% oversubscription of the the targeted amount of ¢1.958 billion. 

As usual, majority of the bids came from the 91-day T-bill, whereby ¢2.048 billion of the bids were tendered. For the second week running, all the bids were accepted.

For the 182-day bill, ¢346.60 million bids were received from the investors, largely commercial banks. However, ¢339.54 of the bids were accepted.

With regard to the 364-day bill, ¢143.21 million of the bids were accepted.