Interest rates remain relatively stable for 3-weeks running amid surge in inflation

Interest rates remained relatively same for the third week running, despite the surge in inflation.

The rate of inflation went up to 29.8% in June, the highest since 2003, a situation many thought will have pushed interest rates up further, but that hasn’t been the case.

According to the results of the weekly Treasury bills, the interest rate on the 91-day Treasury bills stood at 25.95%, compared with 25.89% recorded a week ago.

That of the 182-day T-bills was 27.46%, a little higher than the 26.54%, registered the previous week.

This signifies that liquidity has improved drastically on the money market, as a result of the International Monetary Fund’s announcement that it will help support managers of the Ghanaian economy to strengthen its weak economic fundamentals.

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According to the auctioning results by the Bank of Ghana, government recorded ¢1.150 billion from the sale of the weekly Treasury bills, an oversubscription of 23.48%.

It accepted ¢1.088 billion from the bids tendered in.

The target for the sale of the short term securities was ¢932 million.

However, chunk of the amount came from the 91-day T-bills whereby ¢940.17 million was secured. ¢210.72 was mobilized from the 182-day T-bills.

Meanwhile, all eyes will be on the Monetary Policy of the Bank of Ghana when it begins its quarterly meeting from tomorrow, June 20^th, 2022.

It’s unclear whether the MPC will adjust the Policy Rate upwards or keep the rate same from May 2022 19%, despite the increase in inflation.