Treasury

Bankers Acceptance
Secured short term credit instrument issued by companies

Backed by the bank’s guarantee

Maturities range from 30-270 days

Pays a premium over 91 day T-bill rate

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Currency Swap

Is a currency trade with one currency converted into another and “swapped” back on a pre-determined date in the future.

Considerations for

Effective cash management tool

Gives customer the ability to bring forward or delay exiting transactions

Considerations against

Depending on the interest rate differential, there could be a change to the transaction

Margin/collateral requirement

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Spot Deals

A currency trade settled within two business days of transacting:

•  Same day, next day, spot

Consideration for:

Simplicity

Flexibility

Ability to take full advantage of favourable market moves

Generally, no collateral requirements.

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Forward

A currency trade with the exchange rate fixed today for settlement on a pre- determined date in the future

  • Anything beyond two business days
Considerations for:

• 100% protection against adverse currency moves

• Eliminates uncertainty

• Provides certainty and enhances ability to plan

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Treasury Bills

Short term investment with a maximum investment period of 365 days.

Features:

Funds can be invested at an agreed duration eg 91, 182, 362 days, etc

Part or all of investment may be withdrawn (at a discount) before maturity

Roll-over option (with or without interest)

Third-party investment is allowed.

The minimum amount to invest is GHS100.00

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Fixed Deposits

Placement of funds for a fixed period of time at an agreed rate.

Features.

  • Maturities range from 30 days to 365 days
  • Minimum deposit amount of GHS 10,001
  • Funds deposited are accessible only on maturity
  • Third-party investment is allowed.

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Call Accounts

Placement of funds with no specified maturity period

Features:

  • Investor/depositor can terminate arrangement by giving due notice based on an agreed notice period
  • Minimum deposit amount of GHS 10,000
  • Part or full amount deposited is accessible any day on notice.

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Flexible Forward

Currency trade with the exchange rate fixed today where future settlement is within a pre-determined “draw-down period” of up to three months.

Considerations for:

• Offers all the benefits of a forward, plus

• Effective cash management tool, through enhanced flexibility

• Unlimited draw-downs until contract has been fulfilled.

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Commercial Papers
·  Short term unsecured promissory notes issued by blue chip companies (high credit rating) at a discount for cash

·  May be under-written by the banks in certain cases

·  Maturities range from 30-270 days

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