Interest rates inched up to 33% to reflect surging inflation and the rapid depreciation of the cedi.<\/p>\n\n\n\n
The increase in interest rates is however lower than the current inflation of 37.2% and the rate of cedi depreciation which is more than 50%.<\/p>\n\n\n\n
This means the real rate of return of the short-term securities for investors is still negative.<\/p>\n\n\n\n
Again, the lower yields of the Treasury bills compared to the rates of inflation and the cedi depreciation make it unattractive for investors to purchase the cedi denominated assets<\/p>\n\n\n\n
Once again, the sale of Treasury bills by government was undersubscribed for the second consecutive week by 16%.<\/p>\n\n\n\n
According to the auctioning results by the Bank of Ghana, the interest rate on the 91-day T-bills went up by 0.76% to 32.15%.<\/p>\n\n\n\n
That of the 182-day T-bill also hit 33.07%, from 32.23% the previous week.<\/p>\n\n\n\n
The results also showed that the government secured a total of \u00a21.31 billion from the sale of the short-term instruments, against a target of \u00a21.56 billion.<\/p>\n\n\n\n
Some market watchers may attribute the under-subscription of the financial instruments to liquidity challenges within the economy.<\/p>\n\n\n\n
The rising interest rates means government will pay more for interest payments this year.<\/p>\n\n\n\n