Further analysis of the Domestic Debt Restructuring indicate that the 23 banks operating in this country will lose additional ¢6.1 billion, due to reduced coupon rate and the extension of the maturity period from five to 15 years.
According to the liquidity gap analysis by Dr. Richmond Atuahene and K B Frimpong, the 23 banks would have generated positive cash flow of about ¢10.1 billion over the period, from the original coupon rate of 19.3% per annum.
But following the implementation of Domestic Debt Exchange Programme (DDEP), the extension of maturity period and reduction of coupon rate will impact heavily on their earnings from investments in Government of Ghana Bonds.
“This liquidity gap is a result of the drop in the average bond rate of 19.3% to weighted average rate of 9% per annum, thus leading to nominal negative liquidity gap of 10.3%. The liquidity gap is expected to get worse if the average customer deposit rate was around 10% per annum, but later declined to weighted average rate of 9% per annum”.
Source:Mybrytfmonline.com/Kwabena Nyarko Abronoma
