- Government is anticipating lower borrowing costs
- Annual inflation fell to 23.1% in May
- A rate cut is possible later in 2024
Ghana’s government is anticipating lower borrowing costs in the latter half of 2024, thanks to a projected decline in inflation.
This follows a significant drop in the inflation rate in May.
Inflation Down, Treasury Bill Yields Follow
- Annual inflation fell to 23.1% in May, down 190 basis points from April.
- Treasury bill yields decreased across the board, reflecting lower inflation risk.
- The 91-day yield dropped the most, down 17 basis points to 24.87%.
Favorable Outlook for Borrowing
- Analysts expect T-bill yields to continue decreasing due to lower inflation.
- However, high government demand for funds could slow the decline.
Central Bank to Maintain Tight Grip on Inflation
- The Bank of Ghana is expected to keep interest rates high to control inflation.
- A rate cut is possible later in 2024, potentially in September or November.
Ghana’s Growing Debt
- The country’s domestic debt reached GH¢278.6 billion at the end of February 2024.
- Total public debt stands at GH¢658.6 billion, or 62.7% of GDP.
Recent Treasury Bill Auction
- The Treasury fell short of its target in the latest auction, receiving less than the GH¢4.9 billion desired.
- Despite the shortfall, all bids were accepted.
Upcoming Auction
- On June 21st, the Treasury aims to raise GH¢3.56 billion through issuing new bills to refinance maturing debt.
