High Interest Rates to Persist Amidst Strong Treasury Bill Demand
Strong Demand for Treasury Bills Leads to Elevated Interest Rates in Ghana
- Interest rates are expected to remain elevated in the near future
- This is due to increasing demand for liquidity in the short-term market.
- The continued upward pressure on yields is attributed to factors such as renewed near-term inflation
Interest rates are expected to remain elevated in the near future due to increasing demand for liquidity in the short-term market.
This trend is reflected in the recent rise in Treasury bill yields, with the 91-day bill reaching 28.04% and the 364-day bill hitting 30.07%.
Strong investor demand, driven by declining real returns and liquidity constraints, has led to a surge in bids for Treasury bills.
The government’s recent Treasury bill auctions have seen strong demand, exceeding targets in some cases. However, the government still faces challenges in fully covering its refinancing obligations.
The continued upward pressure on yields is attributed to factors such as renewed near-term inflation uncertainty and persistent Treasury borrowing needs.
These factors suggest that borrowing costs are likely to remain high in the coming months.
