Interest rates to stabilise; government to borrow GH¢6bn on Friday

Interest rates are expected to stabilise in the next treasury bills auction on Friday January 24, 2025.

This is despite strong demand for the short-term instruments by the government to finance maturing bills.

Interest rates have been escalating since the beginning of this year, indicating some troubling times.

They are now hovering around 29% on the average.

Meanwhile, the government plans to borrow GH¢6 billion on Friday through the issuance of the 91-day, 182-day, and 364-day T-bills.

This will settle GH¢5.60 billion in maturing bills.

There had been strong investor participation in T-bills lately, driven by the opportunity to capitalise on the high-interest rate environment. This is despite market expectations of a hold in this week’s monetary policy decision.

Analysts believe this trend is further supported by strong demand from the Treasury, amid significant upcoming maturities.

Last week, the government recorded its third consecutive oversubscription in the money market, accepting a total uptake of GH¢8.84 billion against a target of GH¢6.35 billion and upcoming maturities of GH¢5.53 billion.

Despite marginal rejections of the 91 and 182 day instruments, yields continued to rose.

The 91-day, 182-day, and 364-day bills settled at 28.42% (+8 basis points), 28.96% (+1 bps), and 30.29% (+11 bps), week-on-week respectively.