Yields on gov’t securities increase, except for 2-year and 5-year bonds
Yields on the various government securities have seen an increase from the period between December 2021 to February 2022.
The increase in the yields on government securities can be attributed to spreads in the nation’s sovereign bonds (foreign bonds) and policy tightening by the Central Bank in response to rising inflation and currency pressures.
According to the Bank of Ghana (BoG), the 91-day and 182-day Treasury bill rates have inched up to 12.8 percent and 13.3 percent respectively, in February 2022.
The respective rates in December 2021 were 12.5 percent and 13.2 percent.
The rate on the 364-day instrument also went up from 16.5 percent to 16.97 percent.
The rate on the 3-year bond increased from 19 percent to 20.5 percent while that for the 2-year and 5-year bond remained unchanged at 19.75 and 21 percent respectively.
On the capital market, the Ghana Stock Exchange Composite Index (GSE-CI) recorded a gain of 43.7 percent in 2021, relative to a loss of 14.0 percent in 2020.
For the first two months of the year, the index has recorded a loss of 3.33 percent.
The year-to-date loss has been driven by a variety of factors to include the reimposition of capital gains tax on securities listed on the GSE which is inducing some investors to switch to Government securities.
Other factors include selling pressures, poor performance of some companies, relatively higher yields on fixed income securities, uncertainty induced by inflation and exchange rate pressures, as well as portfolio reversals.
Meanwhile, the weighted average interbank rate inched up from 12.68 percent in December 2021 to 12.96 percent in February 2022.
The increase in rates at the interbank market level was transmitted to the retail-end of the market, resulting in average lending rates of banks inching up marginally to 20.52 percent in February 2022 from 20 percent recorded in December 2021.
