IC Fixed Income and Currency Guide

In brief

GHANA

Fixed Income:
Treasury builds cash buffer on strong liquidity. Improved money market liquidity enabled the Ghanaian Treasury to exceed its July 2026 issuance target, building a GHS6.1 billion cash buffer ahead of August 2026 coupon payments. Investor demand shifted towards 364-day bills for higher yields. We believe Treasury bill yields have reached a near-term peak and should ease as liquidity returns from coupon payment while we forecast inflation for July 2026 to moderate

Currency:

Cedi retreats as rising FX demand tests external buffers. The Ghanaian Cedi surrendered most of June gains, weakening 3.1% against the US Dollar in July as import-related FX demand rebounded to outweigh the BOG’s USD 1.0bn FX intermediation. Given the decline in FX reserves in June, we foresee constrained intervention capacity but expect regular market intermediation to continue, leaving the Cedi exposed to modest downside risks in August 2026

KENYA

Fixed Income:
Yield curve steepens as investors stay cautious on inflation. Kenya’s Treasury bill market softened in July, but liquidity was sufficient for the Treasury to exceed refinancing needs and issuance targets. The yield curve steepened as investors priced in lingering inflation risks, although ample market liquidity should cap further yield increases despite heavier refinancing obligations in August.

Currency:
Strong buffers support KES stability, but risks linger. The Kenyan shilling remained stable around KES129/USD, supported by stronger FX reserves (partly helped by partial sale of GOK stake in Safaricom), ample import cover and attractive carry trade returns. However, we believe the prolonged exchange rate stability only defers, rather than eliminate, the risk of depreciation pressures that could emerge over the next 12–18 months.

NIGERIA

Fixed Income:
Investors chase higher carry at the long end of the T-bill curve. Nigeria’s Treasury bill market attracted ample demand in July 2026, driven by strong investor preference for 364-day bills with yields above 20%. Despite oversubscription and abundant liquidity, the Treasury kept yields broadly unchanged, signalling confidence in current pricing and sustained demand for higher-carry securities

Currency:
Higher oil receipts and yields support NGN stability. The Nigerian naira strengthened 0.6% against the US dollar in July 2026, supported by higher FX reserves, stronger oil receipts and the MPC’s decision to keep the policy rate at 26.5%. Elevated domestic yields remain an attraction to portfolio inflows, reinforcing our expectation of near-term exchange rate stability.

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