Government to issue four new securities

Accra, Sept. 1, GNA - Beginning from September 6, the Government is to put on the debt market four new securities meant to satisfy the demand of investors who want to put their money in Treasury Bills and long-term instruments.

The Deputy Governor of the Bank of Ghana (BOG), Mr Van Lare Dosoo, who announced this on Wednesday at a sensitisation workshop, said the new securities would allow the Government to extend the average maturity of its debt and reduce the frequency with which it had to refinance maturing securities.

The new securities are a two-year floating rate security, whose interest rates would vary every 91 days, a three-year floating rate tied to the 182-day Treasury Bill interest rate, and two and three-year securities that would carry a fixed rate of interest throughout their lives.

With the introduction of the new securities the Government of Ghana Index-Linked Bonds (GGILBS) would be phased out as they mature.

"It is hoped that with time a benchmark yield curve for government securities will emerge that will allow issuers to compare the cost of their debt to that of Government," Mr Dosoo said.

Mr Dosoo said besides these new securities, the Bank of Ghana would also issue its own bills, with maturities of 28 and 56 days to be sold to banks at its own weekly auctions.

"With the issuance of the new BOG Bills, it will be easier for investors to distinguish the borrowing done at each weekly auction to finance the Government from the borrowing that is done in connection with the Bank's open market operations," Dosoo said. 1 Sept.04