"Banks have not been directed to make provisions against T-Bills, says Governor Addison"

" Banks not directed to make provisions against risks from T-Bills, says Governor Addison \r\n\r\nGovernor of the Central Bank, Dr Ernest Addison, has said banks in the country have not been directed to make provisions for risks associated with purchases with government\u2019s short term debt securities \u2013 Treasury Bills.\r\n\r\nHe made the assertion during the 114th Monetary Policy Committee (MPC) press briefing on Monday, September 25, 2023.\r\n\r\n\u201cWe have not instructed banks to make provisions for any risks associated with treasury bills,\u201d he remarked.\r\n\r\nThe Governor\u2019s assertion was in response to fears of a possible re-structuring of the T-Bills due to the little success attained in getting external creditors to restructure the country\u2019s external debt coupled with the high and unsustainable interest rates on the short-term debt instruments as the country undergoes its first review of the $3bn IMF programme this month.\r\n\r\nMeanwhile, rating agency, Fitch Ratings has indicated its skepticism regarding the inclusion of Treasury bills (T-bills) in Ghana\u2019s Domestic Debt Exchange Programme.\r\n\r\nThe rationale behind Fitch\u2019s stance lies in the delicate balance between high yields on short-term securities and the indispensable role that T-bills play in sustaining Ghana\u2019s fiscal stability.\r\n\r\nTotal outstanding T-Bills issued by Government as of end-August 2023 stood at GHS 55bn.\r\n\r\nWith interest rates on T-Bills hovering between 28% and 32%, Government is expected to make interest payments above GHS 17bn per annum.\r\n\r\nMeanwhile, the Bank of Ghana has revealed that Ghana\u2019s public debt witnessed a notable uptick, surging by approximately \u00a26.3 billion during the second quarter of 2023. This substantial increase propelled the nation\u2019s total debt to \u00a2575.5 billion, which translates to some $52.3 billion.\r\n\r\nStrikingly, this figure represents a significant 71.9% of Ghana\u2019s Gross Domestic Product (GDP).\r\n\r\nBreaking down the components of Ghana\u2019s public debt, data from the Central Bank discloses that the external component reached $29.9 billion (\u00a2328.6 billion) in June 2023, surpassing the figure recorded in April 2023, which stood at $29.3 billion (\u00a2321.3 billion).\r\n\r\nIn contrast, the domestic debt stood at \u00a2246.9 billion at the close of June 2023, constituting approximately 30.8% of the nation\u2019s GDP.\r\n\r\n "

"Banks have not been directed to make provisions against T-Bills, says Governor Addison"

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