July 21, 2014 / 12:56 PM / 3 years ago

Ghana to issue 400 million-cedi 3-yr domestic bond on July 31

ACCRA, July 21 (Reuters) - The Bank of Ghana will issue a 400 million-cedi ($117 million) three-year domestic bond on July 31 to support the government’s budget, head of the treasury Yao Abalo said on Monday.

The auction, which is open to foreign investors, is the first of two domestic bonds planned for the second half of 2014.

“It is a new issue to support government finances,” Abalo said, adding that another transaction of the same maturity and value will be issued in October to roll over maturing debts.

A similar auction held in May attracted a yield of 24.44 pct, and analysts forecast the new issue could attract between 23 percent and 25 percent.

Yields on Ghana’s government debt have risen above the average in sub-Saharan Africa since January, reflecting the government’s battle to bring down a stubbornly high budget deficit and widening debt, while the local cedi currency has slumped around 30 percent.

The yield on Bank of Ghana’s 91-day bill rose to a fresh three-year high of 24.8385 percent at the weekly auction last Friday, from 24.3109 percent previously.

$1 = 3.4100 cedis Reporting by Kwasi Kpodo, editing by Louise Heavens

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