Gov’t secures lower than expected yield on 3yr bond

Ghana accepted GH?470.08million (US$136.25m) worth of bids for a three-year bond last week Thursday, paying a lower than expected yield of 23.23 percent in a heavily oversubscribed sale, the central bank said.

The West African country which exports gold, cocoa and oil, received a total of GH?898.72million in bids at the sale, the first in a series earmarked for the settlement of maturities and to finance government projects.

"It was a successful auction and it indicates the investor confidence in our economy," Deputy Treasurer Collins Antwi told Reuters.

Foreign investors accounted for nearly 70 percent of the bids accepted. The bond was issued as the government on Thursday began a final round of talks for a financial deal with the International Monetary Fund aimed at stabilising the economy.

Ghana is currently grappling with economic challenges reflected in high deficits, high interest rates and a 16.4 percent inflation rate compared with its African peers, and its benchmark 91-day Treasury bill is above 25 percent.

A similar auction last year attracted a yield of 23 percent, and traders had expected the yield to rise on Thursday.

Ghana's economy grew at around 8 percent for years, but the government forecasts growth will slow to 3.9 percent in 2015 -- in part because of a stubbornly high budget deficit