Bank of Ghana
Bank of Ghana

Investors have begun ditching treasury bills and now exploring other investment instruments in the country over the continuous significant decline in T’ Bill rates in the country.

Despite Treasury bills are nonetheless, one of the most patronized investment instruments by most investors in Ghana.

Investment Fund Managers are, however, anticipating increased long term investments with the reduction of the policy rate by the Bank of Ghana (BoG).

The forecast is based on higher returns on long term investments compared with short term ones.

The Bank of Ghana has for the third consecutive time reduced the policy rate to 21 percent, while inflation rate stands at 12.1 percent.

The Group Chief Executive Officer of Databank, Kojo Addae-Mensah, in an interview with Accra based radio said, financial institutions should gear towards long term investments to get higher yields.

“The reduction of the policy rate is going to affect short term interest rates, no doubt. We anticipated this and that is why for us as an institution, we have brought a motion to our general meeting that we need to get the mandate to then have access to longer dated securities. So going forward, we do not completely drop the yields”.

He added that investing in longer term yields would ensure a strong performance of financial institutions.

“I mean yields are now hovering around 11, 12 and 13 percent but the bond market is looking at 18, 19, and 20 percent. So now that we have that mandate, I think that we are still going to maintain a strong performance and invest in longer dated securities,” he predicted.

Source: Adnan Adams Mohammed