Rising interest rates good indication to save for higher returns – Financial analyst

Dr. Williams Peprah.png Dr. Williams Peprah is a financial analyst

Thu, 9 Jun 2022 Source: www.ghanaweb.com

Financial analyst proposes reduction in expenditure

91-day Treasury bill selling at 22.57%

Govt must intensify education on savings, Financial Analyst

Head of Finance Department at the Valley View University, Dr. Williams Peprah, has stated that the current rise in interest rates is a good indication for Ghanaians to save for higher returns.

According to him, this is the time to reduce expenditure and rather channel resources into investments and savings in order to make more money.

Due to the rising inflation and the current increase in the policy rate, interest rates have exceeded 22%.

The 91-day Treasury bill is selling at 22.57%, whilst the 182-day Bill is being quoted at a rate of 24.41% according to the Bank of Ghana.

In a Joy Business engagement, Dr. Peprah stated that “when things are getting out of hand in terms of pricing going up, it’s time for Ghanaians to reduce their expenditure and rather channel resources into savings. We’ll expect government to make sure that the yield curve on Treasury bill rates has a higher yield for short-term securities than the longer term”.

“Also, this is the time that bonds and long-term investments become unattractive. When the interest rate is going up, there’s an inverse relationship. So, the advice is for all Ghanaians interested in being rich to move into savings”, Dr. Peprah noted.

The financial analyst calls on government to intensify education on the benefits of savings in other to attract Ghanaians to buy investment tools.

“Government must make sure a lot of adverts are done to make sure Ghanaians move into savings. In fact, if Ghana was to be a productive country, this would have been the time to move into production; but because we are not there yet, we need to move into proper savings”.

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Source: www.ghanaweb.com
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