Drop in treasury bill rate fruit of DDEP – John Kumah

Deputy Minister of Finance, John Kumah says the government’s Domestic Debt Exchange programme has contributed to a reduction in the rate of Treasury Bills from 35 to 24 percent.

On Wednesday, President Nana Akufo-Addo delivered the State of the Nation Address in Parliament, highlighting some of the government’s key deliverables.

In a debate on the address, John Kumah claims that the government’s DDEP is producing positive results for economic transformation.

“Last week, the treasury bill rate in the country was at 35 percent. Today as we speak, the treasury bill rate has been reduced to 24 percent because of the DDEP. We had oversubscription and even at 24 percent, there is an oversubscription of 121 percent. We are going to see a further reduction in the coupon rate of T-Bills. What that portends for our country in future is that inflation will come down, cost of borrowing for the private will also go down and this will restore economic stability and inclusive growth of our economy.”

Executive Director of Dalex Finance, Joe Jackson, has lauded government’s decision to reject bids made for the 91,182 and 364 day bills with yields over 35% in a recent T-Bills auction on March 3, 2023.

This, he notes is a crucial step towards addressing the high interest rates on government securities.

Government rejected all the bids for the sale of Treasury bills from investors on Friday March 3, 2023, citing concerns that the yields were too expensive to maintain.

It was rather seeking to raise ¢2.78 billion from the T-bills this week to refinance maturing bills worth ¢2.55 billion, but it described the yield as too expensive

According to sources, the government is now demanding bids for Treasury bills with yields less than 30%, indicating its commitment to reducing the cost of borrowing for itself and other investors.

Source: citinewsroom