Former Finance Minister Mohammed Amin Adam has raised concerns about the current administration’s approach to managing Treasury bill rates, questioning whether there is a clear long-term strategy behind the recent declines.
He argued that the drop in Treasury bill rates is not the result of any innovative economic policy but rather the consequence of excess liquidity in the system.
According to Amin Adam, the government’s decision to reject some Treasury bill bids is not a calculated financial strategy but a reaction to the influx of funds in the domestic market.
He attributed this surge in demand partly to non-resident investors who, despite IMF restrictions, may be channeling their funds into Ghana’s T-bills through local institutions.
This, he explained, has created a situation where more money is chasing fewer bills, leading to a decline in interest rates.
He acknowledged that lower Treasury bill rates benefit the government by reducing borrowing costs, but he was quick to challenge the sustainability of this trend.
“It’s not any magic, and it’s not any sustainable strategy,” he stated on Good Evening Ghana with Paul Adom-Otchere which was monitored by MyNewsGH, emphasizing that without a well-defined financial roadmap, these reductions may not last.
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