The recent drop in Treasury Bill (T-Bill) interest rates has saved the government more than GHS 1 billion, according to Minister of Finance Dr. Cassiel Ato Forson.
“Reduction in T-Bill interest rates has led to government saving over GHc 1 billion in interest payments, and that money can be channelled to critical areas of the economy,” he quipped.
He revealed the information during the National Economic Dialogue (NED) that is currently taking place at the Accra International Conference Centre (AICC).
A few days ago, the Finance Minister tweeted that the government’s responsible public debt management measures were the reason behind the drop in T-Bill interest rates.
The Finance Minister pointed out that within the first 50 days of President John Mahama’s administration, interest rates on short-term government securities have fallen by a total of 21.1%.
Dr. Forson gave a summary of the drop in each tenor, saying:
- The 91-day T-Bill rate has fallen from 28.34% to 20.79%, a reduction of 760 basis points (7.6%).
- The 182-day T-Bill rate has dropped from 28.96% to 22.98%, reflecting a 600-basis-point (6%) decrease.
- The 364-day T-Bill rate has declined from 30.17% to 22.69%, marking a 750-basis-point (7.5%) cut.
He underlined that rising investor confidence in Ghana’s economy is indicated by the rates’ lower trend.
Lower borrowing costs for the government are anticipated as a result of the T-Bill rate drop, which may also result in lower interest rates on loans in the general economy.
Improved investor mood, efforts at fiscal consolidation, and improved liquidity conditions in the financial market are some of the reasons given by financial analysts for the fall.
In the government’s plan to control public debt and stabilize the economy, the development is viewed as a step in the right direction.
Source: newsthemegh.com