The Ghanaian government was forced to cancel yet another domestic bond auction due to high yields.
According to Bloomberg, Ghana’s debt issuance office rescinded its decision on the issuance of its planned sale of 2-year and 5-year cedi-denominated bonds. The decision to cancel the planned auction was largely due to the increased premium demanded by investors for purchasing the bonds.
The coupon rate for the 2-year bond was pegged at 21.50 percent, while the 5-year bond’s coupon was 20.75 percent.
The jump in yields has not just been contained to Ghana’s hard currency and local bonds, with Treasury bill rates also surging, which has resulted in significantly higher debt servicing costs for the government.
With major central banks still hiking rates aggressively and risk appetite weak, funding pressures in Ghana are expected to remain acute in the near term.
