Interest rates continued to surge on the money market to nearly 30%, as the government recorded a 31% oversubscription of Treasury bills sale.

The oversubscription was primarily a result of the lower target of ¢1.57 billion.

According to the auction results, a chunk of the bids came from the 91-day T-bill, but at a higher interest rate.

About ¢1.63 billion were tendered at a yield of 24.39%, compared with 23.95% the preceding week. However, about ¢1.544 billion were accepted.

For the 182-day T-bill, about ¢297.63 million were tendered by the investors. All the bids were accepted at a rate of 26.02%, 0.23% higher than previously.

Almost ¢137 million were, however, tendered for the 364-day T-bill at a rate of 29.64%.

Many market watchers have described the rising interest rates as a major concern as the primary motive of the Domestic Debt Exchange programme was to bring down the cost of government debt.

There is also the crowding-out effect as the banks continue to participate significantly in government short-term securities, therefore reducing total loans and advances.

Overall, lending rates will remain high, depriving many businesses and households of accessing funds.