In the most recent treasury bills auction conducted by the Bank of Ghana, interest rates on the yield curve continued their downward trend for the fifth consecutive week. This decline comes in the wake of an anticipated easing in January 2024 inflation, contributing to the overall reduction in interest rates.

The diminishing interest rates are expected to result in a marginal decrease in the cost of the government’s domestic debt. Specifically, the rate on the 91-day bill experienced a 30 basis points reduction, settling at 28.29%.

Similarly, the 182-day bill took a significant dip to 30.79%, down from the previous week’s 31.09%, while the one-year bill saw a decline to 31.39% from the preceding week’s 31.79%.

Despite the lowering interest rates, demand for Treasury bills remained robust, with the government successfully securing GH¢4.52 billion from the sale of these short-term securities. This represented an oversubscription of approximately 58.26%.

The 91-day bill attracted the majority of bids, with an uptake of GH¢1.914 billion, constituting around 42.27% of the total. The 364-day bill followed suit, garnering a subscription of GH¢1.402 billion, and all bids were accepted. The 182-day bill also received bids totaling GH¢1.211 billion, with all bids being accepted.

The continued decline in interest rates, coupled with sustained high demand for Treasury bills, indicates a favorable economic environment and a positive response to the Bank of Ghana’s monetary policies.