Interest rates have reached the 20% barrier, reflecting the Bank of Ghana‘s recent rise in the Monetary Policy Rate.
In addition, the government narrowly missed its Treasury bill auctioning goal, signaling limited liquidity on the money market.
The interest rate on the 91-day Treasury bill was 19.93 percent, while the 182-day and one-year notes had rates of 22.94 percent and 24.46 percent, respectively.
This backed up the Bank of Ghana’s recent rise in the benchmark lending rate to 19 percent, which was intended to assist contain inflation and restore monetary stability.
Obviously, this will drive loan rates further higher, to around 25% on average, raising the cost of living and conducting business.
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Depending on the risk profile of the clients, some banks may lend to individuals and businesses at rates as high as 32 percent per year.
Despite the rise in interest rates, the government nearly missed achieving a 100% subscription rate for the last Treasury bill auction.
It was able to raise $1.15 billion against a goal of $1.28 billion.
This suggests that the secondary market’s liquidity is still tight.
| Securities | Bids Tendered (GH¢) | Bids Accepted (GH¢) | Interest rate |
| 91 Day Bill | 877.50 million | 877.50 million | 19.938% |
| 182 Day Bill | 150.54 million | 145.49 million | 22.949% |
| 364 Day Bill | 129.33 million | 101.51 million | 24.463% |
| Total | 1.157 billion | 1.124 billion | |
| Target | 1.282 billion |
SOURCE: myjoyonline
