01November2014

Business in Ghana

Economist lauds a move by the Central Bank to raise 300 million Ghana Cedi bond

 

A renowned Ghanaian economist, Dr. Joe Abbey has welcomed a move by the Bank of Ghana to raise 300 million Ghana Cedi bond.

 

 

The Central Bank is expected to raise the five year bond on Thursday, 23rd August.

 

Dr. Abbey told Gold Business Report the move will recapitalize the Central Bank’s lost reserve.

 

He said “we have lost quite a bit of foreign exchange because the Bank of Ghana had to entertain large amount of foreign exchange to douse the flame of speculative attack on the cedi. It provides key opportunity to rebuild some of the lost reserves”.

 

He also said “from the supplementary budget on accounts of higher interest cost, the depreciation of the cedi has raised the cedi value of the external debt charges of the country. The attempt to induce the flows to the country meant that the initial 5 year bond attracted 26 percent.

 

In May this year, the three-year bond issued by the Government to finance infrastructural projects was heavily oversubscribed.

 

In all, the Central Bank is hoping to raise 8.5 million Ghana Cedis for the second and third quarters of this year from the sale of government securities. This should bring the total amount government wants to raise from the domestic market by September this year to 11.1 million Ghana Cedis.

 

Source: Gold Business Report || Henry George Martinson