By Zainab.joaque@awokonewspaper.sl
Freetown, SIERRA LEONE – The Central Bank’s analysis of the country’s interest rate trends on treasury bills (T-bills) revealed concerning discrepancies, particularly in the 182-day and 91-day T-bills market, which remained highly illiquid. The yields on these T-bills did not accurately mirror the underlying economic and financial environment.
According to the Monetary Policy report, the interest rate on the 364-day T-bills, which had been steady at 28.28 percent until July 2023, experienced a slight uptick to 29.13 percent in September 2023, followed by a further increase to 31.07 percent in November 2023.
However, the report highlighted an increase in intermediation in the interbank money market during the third quarter of 2023. The volume of interbank transactions rose by NLe187 million (4.2 percent) to NLe3,480 million by the end of September 2023.
The Central Bank noted that no banks accessed the standing deposit facility (SDF) window during the third quarter of 2023. Additionally, the interbank weighted average yield rose by 0.9 percentage points from 20.99 percent in June 2023 to 21.89 percent in 2023 Q3. This increase was largely in line with the change in the monetary policy rate (MPR), signalling ongoing liquidity tightness in the money market. ZIJ/18/3/2024