ACI Ghana weekly money market update – April 1, 2024

Below is Ghana’s money market update for the week beginning April 1, 2024.

KEY TAKEAWAYS

Last week short-term interest rates continued falling. The yield on the 91-Day, 182-Day and 1-Year T-Bill rates all fell by 25bps to close at 25.75%, 28.25%, and 28.85% respectively. BOG 56-day bill rate and interbank interest rate remained unchanged at 29.00% and 28.47% respectively.

Expected maturities for the week of April 1, 2024, include:

>> GHS 2.63 billion in Treasury Bill maturities comprising:

1. GHS 2.147 billion in 91-day maturities due on April 1^st
2. GHS 484.17 million in 182-day maturities due on April 1^st

>> GHS 1.58 billion in 56-day Bill maturities comprising:

1. GHS 390.90 million due on April 1^st

2. GHS 1.65 billion due on April 1^st

The Treasury Bill auction on Friday witnessed weakened demand being undersubscribed by 43.42%. The Government accepted a total of GHS 2.35 billion, well below the auction target of GHS 4.16 billion by GHS 1.81 billion. This was expected given the BOG’s directive regarding CRR and LDR.

Money Market Term(s) of the Week

Asset swap and liability swap: “Asset swap” and “Liability swap” are used according to the side of the balance sheet that is changed by the transaction.

An asset swap is the swapping of a fixed interest rate investment into a floating rate investment (fixed-rate payer swap) or a floating interest rate into a fixed rate investment (fixed-rate receiver swap).  A liability swap deals with the re-financing side of the balance sheet, turning a fixed into a floating refinancing (= fixed-rate receiver swap) and a floating into a fixed refinancing (= fixed-rate payer swap).