Securities or long-term debt instruments or bonds were the largest components of banks’ investment portfolios in 2022.
This is despite the Domestic Debt Exchange Programme.
According to the Bank of Ghana, its share increased to 76.4% in December 2022 from 75.3% in December 2021.
The share of short-term bills or Treasury bills in total investments, however, declined to 23.3%, from 24.4% over the same comparative period.
Also, the share of equity investments remained negligible at 0.3%.
Banks investments contracted by 4.8% in 2022
Meanwhile, banks investments contracted by 4.8% to ¢79.2 billion in December 2022 from a growth of 29% in 2021, as banks rebalanced their asset portfolios in favour of loans and other assets.
The portfolio reallocation by banks was in response to higher Cash Reserve Ratio requirements introduced during the year and the Domestic Debt Exchange Programme (DDEP) announced by the government.
Consequently, the share of investments in total assets declined to 35.8% in December 2022, from 46.2% in December 2021.
The decline in investments reflected similar declines in short-term bills and long-term securities with bills contracting by 9.2% in December 2022, from a growth of 42.9% in December 2021, while securities declined by 3.3% at end-December 2022, following a growth of 25.2% in the previous year.