Rating agency, Fitch, expects treasury bill yields to decline in 2024 as the government progresses with the external debt restructuring, whilst the economy recovers, supported by Ghana’s International Monetary Fund program.
Again the Bank of Ghana will reduce its monetary policy rate in response to declining inflation.
“However, we still expect treasury bill yields to remain high by historical standards”, it said in its latest assessment of the Ghanaian economy.
This it said should continue to support wide Net Interest Margins, which will help to absorb impairment charges from Eurobond exposure and NPLs while contributing to further capital recovery.
Continuing, the UK-based firm said strong profitability will complement the capital-raising initiatives encouraged by the Bank of Ghana, which instructed undercapitalized banks to present credible recapitalization plans last year.
“We expect several banks to raise core capital from shareholders and to seek capital support from Ghana Financial Stability Fund”, it added.
The government has committed the local currency equivalent of US$500 million to the fund and the World Bank’s International Development Association has committed US$250 million.
It further said that foreign-owned banks are generally best placed to deal with the difficult operating environment in Ghana as they can call on extraordinary support from their large shareholders.
Investors show immense interest in T-bills
Last week’s treasury bill auction gained increased participation from investors, partly following the improved liquidity level from the payment of coupons on the new bonds.
Investors pushed through total bids valued at GH¢6.97 billion against the auction target of GH¢6.29 billion. The treasury accepted all bids.