Investors demand more interest rate on gov't treasuries

Investors are still demanding more interest rate on short term government treasuries as yields continue to hover around 14.06%.

 Despite the signs of a reduced inflation rate and relative stability in the exchange rate, investors are demanding more for investments in short term government treasury securities.

This according to reports may indicate some risk factors which may be due to a slow fiscal consolidation process complicated by Covid-19.

The demand from the investors was evident in the result of the treasury bill auctioned last Friday.

The demand for more yield begun in August when investors were largely moving towards the Bank of Ghana bills and the COCOBOD bills which are offering slightly higher yields than the government treasuries.

But the additional interest rate on government securities is quite marginal which shouldn't be much of a cause to worry. 

Data from the BoG indicates that the government of Ghana treasury securities were been priced at about a rate of 13.97% in a greater part of the second quarter but this has consistently increased to 14.06% by the end of August. 

Meanwhile, the Central Bank has mobilised 1.02 billion cedis for the government for both the sale of the 182day treasury bills. 

The Bank of Ghana is hoping to raise 1 billion cedis in the next auction this Friday.