Treasury

The Bank of Ghana’s (BoG) recent decision to implement a 15 percent unified Cash Reserve Ratio (CRR) on both local and foreign currency bank deposits is poised to intensify pressure on the already strained Treasury market. Last week’s auction results revealed such fears as there was a liquidity squeeze following the new CRR directive. The Treasury’s target of over GH¢5billion was undersubscribed by GH¢1.7billion, as the new directive drained excess liquidity on the interbank market while commercial banks raced to meet the regulatory requirement. Since November 30, the new unified CRR mandates a 15 percent reserve requirement on both cedi accounts…

The Monetary Policy Committee (MPC) of the Bank of Ghana has implemented a tighter monetary stance in response to emerging upside risks to inflation. This move will have significant implications for Treasury securities, particularly 91-day to 365-day T-bills as they will endure an extended period of higher yields. During its July 23 policy meeting, the MPC raised its policy rate by 50 basis points (bps) to 30 percent. This increase is aimed at countering inflation risks and calls for substantial tightening in both the fiscal and monetary policy frameworks. The Committee noted a cumulative 130 bps increase in headline inflation…