In brief
- GHANA
Liquidity boost drives bull steepening: Investors favour longer T-bills. The GHS10.8bn DDEP coupon payment strengthened an already buoyant Cedi liquidity in August, driving strong T-bill demand to exceed the auction target and dragging yields lower. The resultant bull steepening of the yield curve coincided with investors favouring higher-yielding T-bills over BOG OMO securities, while the 364-day tenor was the preferred segment. We foresee relatively stable yields in September 2026 mainly due to the softer rollovers and likely softening of demand for the T-bills. For bank credits, we estimate 44bps decline in the September 2026 Ghana Reference Rate (GRR) to 10.18%.
- KENYA
Fixed Income:
Investor appetite recovers as longer tenors gain traction. Investor demand improved in August, allowing the Treasury to exceed both its auction target and T-bill maturities. Bid allocation shifted from 91-day bills towards 182- and 364-day tenors, with stable yields suggesting markets view recent inflation upticks (6.6% in August 2026) as transitory. However, we believe the favourable front-end pricing will limit further rotation into 364-day bills.
Currency:
Kenyan Shilling stays flat while strong reserves mask longer-term depreciation risk. The Kenyan shilling remained broadly unchanged at KES 129/USD in August 2026, extending its prolonged stability. The strong FX reserves of USD 15.2bn, equivalent to 6.3 months of import cover, anchors the near-term outlook, while the attractive real yields will sustain investor patience. However, we retain a cautious medium-term view and flag depreciation risks further ahead.
- NIGERIA
Fixed Income:
OMO competition dampens T-bill demand, but yields remain resilient. Nigerian T-bill demand fell sharply in August as expanded access to CBN OMO auctions redirected investor funds towards higher-yielding OMO securities, alongside a lower T-bill target. Despite the weaker demand, the bids sufficiently covered the target, keeping front- and mid-curve yields broadly stable while 364-day yields declined.
Currency:
Naira tops our African FX chart: Strong carry trade anchors portfolio flows. The Naira strengthened 2.4% in August, extending its year-to-date gain to 8.1%, supported by deeper FX market activity following CBN reforms. With a 26.5% policy rate and attractive OMO and T-bill yields, we believe Nigeria remains the standout African carry trade, supporting portfolio inflows and Naira stability ahead.
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