Rollover cost of T-bills reduced substantially, one-year bill yield drops 19% since December 2024
Last week, the government increased its T-bills uptake reflecting higher financing needs following weeks of below-target acceptances.
The cost of rolling over Ghana's local currency debt has significantly decreased since December 2024, with interest rates on six-month treasury bills falling to around 6.5% and one-year bills at 10.1% by the end of August 2026, according to S&P Global. This reduction is a stark contrast to the almost 30% interest rates at the end of 2024.
The Ministry of Finance imposed a three-year ban on the issuance of new medium- or long-term domestic bonds following the domestic debt restructuring in December 2022. While the government began issuing longer tenor bonds in 2026 to extend the maturity profile of its local currency debt, the conflict in the Middle East is expected to counteract these gains by driving up inflation and financing costs, putting pressure on the cedi.
The government's increased T-bill uptake, reflecting higher financing needs, was evident last week, with an issuance target of GH¢5.02 billion. However, the government raised GH¢1.53 billion above this target, which may temporarily alleviate funding pressures. Analysts expect yields to remain relatively stable, as elevated financing needs limit the potential for further declines, and the GH¢1.53 billion raised this week will cover maturing bills of GH¢3.91 billion.
Brief written by urgent.news from MyJoyOnline Ghana's own syndicated text. Machine-written — may contain errors; check the original before relying on it.
