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The Bank of Ghana’s September 2023 Monetary Policy Report reveals that investments in treasury bills have become the largest component of banks’ investment portfolios.
According to the report, the share of treasury bills (T-bills) surged significantly to 51.0% in August 2023, a substantial increase from the 17.8% recorded in August 2022.
This notable increase in the allocation of short-term investments is primarily attributed to reduced activity in the medium-to-long-term instruments due to the impact of the Domestic Debt Exchange Programme.
As a result, the proportion of long-term securities in the banks’ total investments witnessed a substantial decline, falling to 48.8% from 81.9% over the same period.
In contrast, equity investments remained minimal, with a slight decrease to 0.2% from 0.3% during the period under review.
Meanwhile, total investments amounted to ¢97.1 billion in August 2023, marking a notable increase of 19.9%. This contrasts with the modest growth of 0.8% reported in August 2022. Banks continued to reposition their asset portfolios in favor of short-term investments, influenced by the Domestic Debt Exchange Programme (DDEP) and revisions to the Cash Reserve Ratio.
Short-term investments by banks increased significantly, soaring by 242.6% in August 2023. This followed a contraction of 38.2% observed in August 2022. Conversely, long-term investments, particularly in securities, recorded a 28.6% contraction, reversing a growth of 16.9% during the same reference period.
Consequently, the proportion of investments in relation to total assets experienced a slight upward shift to 39.7% in August 2023, as compared to 39.6% in August 2022.
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