In its latest treasury bill auction, the Ghanaian government successfully borrowed 3.344 billion, slightly surpassing its target by 3%. The auction, held on Friday July 5, also saw marginal adjustments in interest rates for shorter-term bills, while rates for longer-term notes remained unchanged.
The interest rate for the 91-day bill saw a slight reduction to 24.78%, down from previous levels. Similarly, the 182-day bill now stands at 26.74%, reflecting a marginal decrease. However, the rate for the one-year note remained steady at 27.78%, indicating stability in longer-term borrowing costs.
Notably, the 91-day bill continued to dominate investor interest, accounting for a significant 75% of the total amount raised during the auction. This preference underscores the short-term liquidity needs and investor confidence in shorter-duration investments.
The marginal decline in interest rates also contributed to a slight reduction in the Ghana Reference Rate, dropping from 29.44% in June to 29.35% in July. While this reduction may offer some relief, particularly for prime borrowers, interest rates remain relatively high across the board.
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Ghana’s monetary policy rate, a key determinant of lending rates, remains elevated at 29%. The International Monetary Fund (IMF) has advised maintaining an “appropriately tight monetary stance,” suggesting that any significant reduction in lending rates may not be imminent.
Looking ahead, analysts anticipate that unless there is a substantial decrease in the policy rate, lending rates in Ghana are likely to remain elevated, impacting borrowing costs across various sectors of the economy.
The outcome of the treasury bill auction signals continued investor interest in Ghana’s debt instruments despite prevailing fiscal and monetary challenges.
