Ghana officially announces it can no longer pay its debt

Ghana is suspending debt service payments for its Eurobond and commercial loans, and its bilateral debts, the west African nation’s ministry of finance has confirmed in a press release.

The Ghanaian government is suspending all debt service payments under certain categories of its external debt.

The debt service payments will resume upon the "orderly restructuring of the affected obligations."

Ghana’s ministry of finance noted that the "suspension is an interim emergency measure pending future agreements with all relevant creditors.”

The country will continue to service its multilateral debts such as those owed to the IMF or World Bank.

By implication, investors in Ghana bonds will be affected as they will not receive any coupon payments until the situation is addressed.

Investors with Ghanaian bonds who mark to market will take loss provisions this year as a result of this announcement.

Ghana is weathering a major economic and financial crisis compounded by the global risk aversion that has triggered large capital outflows, a loss of external market access, and rising domestic borrowing costs.

Ghana is also stating that the current crisis has impacted its financial resources, especially its external reserves which it claims it needs to preserve.

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