Ghana’s three-month borrowing costs rose to the highest in more than two and a half years as the central bank borrowed more from investors to mop-up excess liquidity.
Yield on the benchmark 91-day Treasury bills rose to 22.91 percent at the auction on August 9 from 22.80 percent a week earlier, according to a statement on the Bank of Ghana’s website today. That was the highest since December 2009.
The bank sold 256.3 million cedis ($131 million) of the bills at the auction compared with 180.1 million cedis the previous week. Banks use the bill rate as a guide in determining their own lending rates.
“The Bank of Ghana is still seeking to reduce the amount of liquidity in the system to provide support for the cedi,” Vida Antwi, a treasury dealer at Databank Financial services Ltd., said by phone today. “The bank wants to make cedi assets more attractive compared to dollar ones.”
The central bank has increased interest rates, introduced new treasury bills and asked lenders to keep more cedis as reserves with the bank, to help bolster the falling currency.
The cedi, which lost 16 percent against the dollar this year, gained 0.1 percent to 1.9545 per dollar as of 11:56 a.m. in Accra, heading for the strongest close since July 13, according to data compiled by Bloomberg.
To contact reporter on this story: Moses Mozart Dzawu in Accra at +233-302-258-797 or firstname.lastname@example.org.