* Cancelled to avoid further spike in yields -Analysts
* Ghana also put hold on planned 2014 $1 bln Eurobond (Adds quotes, details)
By Kwasi Kpodo
ACCRA, March 21 (Reuters) - Ghana has cancelled plans to issue a 5-year domestic bond worth 300 million cedis ($114 million) this month, the central bank said on Friday, a move analysts said was to avoid a further spike in already high yields.
Central bank treasury head Yaw Abalo told Reuters the planned auction, open to offshore investors, had been called off but he did not provide a reason.
Abalo said Ghana's finance ministry had made the decision not to go ahead with the auction. It follows on the heels of the government's decision earlier this week to put on hold plans to issue a $1 billion Eurobond in 2014, to avoid paying a higher yield.
The cancellations could put a further strain on the government's budget which is already strangled by a high wage bill, analysts say.
The cocoa, gold and oil exporter announced plans to issue a series of short- and medium-term debt as part of the government's debt restructuring. They included a 5-year bond slated for this month and a 7-year bond auction in May.
Yields on government debt have been on the rise since January. The rate for Bank of Ghana's benchmark 91-day bill rose to 23.1678 percent last Friday, from 22.8927 percent at the previous auction.
Yields on Ghana's 3-year bond were trading at around 24 percent on Friday, according to Reuters data. In comparison, the yield on Kenya's three-year bond is around 10.9 percent. Kenya is set to go ahead with a Eurobond issue soon.
Analysts said Ghana's high rates reflect pressures on its public finances, which have deterred foreign investors from its debt. The cancellation of the 5-year auction was expected and meant the government was becoming uncomfortable with the level of interest rates, they said.
"Clearly, the government is now wary of high interest payments. The market now has to determine if longer-term yields have reached their peak," a trader at an Accra-based bank said, projecting that the 5-year issue would have attracted not less than a 27 percent yield.
The last 5-year bond auctioned in September attracted a 19.04 percent yield.
Ghana's GDP growth shot up to 14.8 percent in 2011, the first full year of oil production, and the country is seen as one of Africa's dynamos due to its economy and stable democracy.
But it has missed a series of fiscal targets in the past year and growth has been hampered by a fall in gold prices, an energy crisis and signs that a government decision to slash subsidies has hurt consumer spending.
The IMF estimates the economy grew 5.5 percent last year, below the government's estimate of 7.4 percent. (Editing by Bate Felix and Susan Fenton)