Rising interest rates in Ghana is affecting demand for stocks in this West African Country. The country is seeing high levels of inflation with the latest data showing the monthly change rate for February at 1.1 percent, against the 3.9 percent recorded in January 2014 and fiscal deficit that is running around 10 percent of GDP and devaluation of the country’s currency which are influencing investors to demand more interest on savings.

Interest rates which were in the order of 18.5 percent at the end of December last year is now at 23.69 percent for the 91 Days Treasury Bills and is up strongly from end of February at 21.21 percent. The exchange rate has slipped by 18 percent against the United States dollar since the start of the year which has effectively wiped out the gains of 11.24 percent in the main index and 17.14 percent in the financial index for the year to date, in real terms.
In the past week, the Ghana Stock market declined and has been doing so from the week starting February 24 and seems poised to decline some more as buying interest recedes with only 14 bids in the market at the close on Friday March 28 and is down from 19 bids on Wednesday and compared to 23 offers on Friday. For the week only 4 stocks enjoyed price gains and 11 declined compared to 8 rising the week before to 6 that declined.
The Ghana Stock Exchange Composite Index closed the week at 2,386.39 points and was down from 2,388.74 at the end of the previous week and the Ghana Stock Exchange Financial index ended at 2,092.75 points compared to 2,110.94 at the end of the prior week.