ACI Ghana weekly money market update – November 25, 2024

Below is Ghana’s money market update for the week beginning November 25, 2024.

KEY TAKEAWAYS

The 91-day, 182-day and 364-day Treasury Bill yields were up by 22 bps, 20 bps and 61 bps, closing at 27.19%, 27.99% and 29.82%, respectively. The BOG 56-day BoG Bill and interbank rate were flat, closing at 27.00% and 27.02%, respectively.

Expected maturities for the week of November 25, 2024, include:

>> GHS 5.84 billion in Treasury Bill maturities comprising:

1. GHS 3.72 billion in 91-day maturities due on November 25^th
2. GHS 795.00 million in 182-day maturities due on November 25^th
3. GHS 1.32 billion in 364-day maturities due on November 25^th

>> GHS No maturities in 56-day BOG Bills:

Demand for the Treasury Bills at the auction on Friday was undersubscribed by 7%. A total of GHS 6.41 billion in bids was accepted. The amount accepted was below the auction target of GHS 6.89 billion by GHS 482.96 million.

Money Market Term(s) of the Week

Currency Swap (cont’d): The major shortcoming of the back-to-back loan agreement is that each loan has a separate agreement such that one party could still be obligated to continue payments even if the other party defaults. To mitigate this shortcoming, in the early 1980s the back-to-back loan was structured into a formalised swap agreement referred to as currency swap. The first formalised swap agreement was the currency swap between International Business Machines (IBM) and the World Bank in 1981. Other forms of swap contracts (commodity, equity, etc.) have emerged over the years owing to the sophistication of the global financial environment.