Central Bank Raises GH¢2.34bn in Short-Term Bill Sale at Nearly 25% Yield
The Bank of Ghana sold GH¢2.34bn of 56-day bills at its latest auction on September 1, with investors demanding close to 25 per cent interest.
The relatively high cost of funding underscores the tight liquidity conditions in Ghana’s financial system and investors’ demand for a significant risk premium.
The cedi has depreciated almost 4 per cent against the dollar in the past month, adding to imported inflation pressures, while domestic borrowing needs remain elevated.
Although the GH¢2.34bn raised represents a successful placement, analysts note that such steep yields increase debt-servicing costs for the central bank and the government, which has increasingly leaned on short-dated securities to finance budget gaps and sterilise liquidity.
Market participants say sustained reliance on short-term borrowing at these interest levels risks crowding out private credit, as banks allocate more funds to central bank instruments rather than lending to businesses.
