Come October 25, this year, the Bank of Ghana (BoG) will issue GH�500 million ($264.6 million) worth of three-year government bonds to restructure short-term debt.
Dr Kwabena Duffuor, Minister of Finance & Economic Planning, who made this known recently, said it was purely to manage government debt and restructure short-dated instruments such as the 91-day and 180-day bills.
�As it is now, we�re facing a flat yield curve and we need to fix that effectively,� Dr Duffuor told journalists recently, adding that he expected the upcoming bond to be oversubscribed.
The yield on Ghana�s short-term instruments including its 91-day bill is around 23 percent almost at the same level as the yield for three-year bonds.
Government has issued a series of three-year and five-year bonds this year to raise funds for infrastructural development and debt management.
Proceeds from the bonds flotation are expected to be used to also mop-up liquidity in support of the local cedi currency which has been battling with the dollar as result of the latter�s demand by Ghanaian traders. The cedi has lost over a third of its value since Ghana began producing oil in November 2010.
The Bank of Ghana (BoG) held several auctions for three-year and five-year government bonds between February and August.
The bonds were all oversubscribed which brought in fresh greenback supplies from foreign investors. Renaissance Capital has predicted between 5 and 10 percent depreciation before end of 2012.
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