The central bank will issue a three-year GHc630million (US$158million) bond on May 21 to raise funds for settling maturing debts, the head of Treasury said on Monday.
The auction, open to offshore investors, is part of government’s debt restructuring plan, Yao Abalo told Reuters, adding that the settlement will be on May 26.
A GHc400million three-year paper issued last month was undersubscribed with only GHc168.26million worth of bids tendered — of which the bank accepted GHc103.37million at 22.49 percent yield.
Analysts say Thursday’s bond is likely to be fully subscribed but at a higher yield, following a 100-basis point policy rate hike by the central bank last week.
“There is appetite for this bond, but we expect the yield to go up marginally to reflect the state of the economy,” a local bond market investor told Reuters.
A finance ministry official said the auction also aims at mobilising liquidity to shore-up the local cedi, which is down nearly 18 percent since January.
Interest rates in Ghana, which started an aid programme with the International Monetary Fund last month, are among the highest in Africa and reflect fiscal challenges facing the economy.