Activity in Ghana’s secondary bond market weakened over the past week as investors adopted a cautious stance ahead of an upcoming monetary policy decision, even as a sovereign credit rating upgrade provided some support to sentiment.
According to the latest Databank review, the Databank Bond Index (DBI) eased by 0.29 points week-on-week to 94.93 points, reflecting softer trading conditions across government securities. The weighted average yield to maturity also moderated to 11.63 percent.
Secondary market turnover dropped sharply by 46.6 percent week-on-week to 1.25 billion Ghana cedis ($83 million), signalling reduced investor participation across the yield curve.
Trading activity remained heavily concentrated in the short-to-medium end of the curve, particularly bonds maturing between 2027 and 2030, which accounted for 88.77 percent of total turnover at a weighted average yield of 11.25 percent.
Longer-dated instruments between 2031 and 2034 contributed 11.23 percent of total activity, trading at a higher average yield of 12.35 percent. However, activity in the ultra-long end of the curve, particularly 2035 to 2038 maturities, remained largely subdued.
A newly issued seven-year 2033 bond recorded modest secondary market interest, with 140.6 million cedis traded across 18 transactions at a weighted average yield of 12.35 percent.
Market analysts expect trading activity to remain concentrated in the front-to-belly segment of the yield curve in the near term, as investors continue to favour shorter-duration instruments amid uncertainty over interest rate direction.
Attention in the market is now focused on the upcoming Monetary Policy Committee meeting scheduled for May 20, 2026, where analysts broadly expect the Bank of Ghana to maintain its policy rate.
Market participants are likely to remain cautious ahead of the decision, with many adopting a wait-and-see approach to interest rate direction and inflation dynamics.
However, sentiment in Ghana’s fixed-income market received a boost following a sovereign rating upgrade by Fitch Ratings, which revised Ghana’s credit outlook upward.
The upgrade is expected to improve investor confidence and potentially support demand for government securities, particularly from foreign portfolio investors.
Despite the improved outlook, analysts say liquidity conditions remain tight, with investors still prioritising short-term risk management over long-duration exposure.
The Ghanaian bond market has been gradually stabilising following earlier fiscal and debt restructuring challenges, but volatility in global interest rates and domestic inflation trends continues to shape investor behaviour.
For now, the market appears to be balancing cautious positioning ahead of monetary policy signals with improving macroeconomic sentiment following the rating upgrade.
