Government will issue a 5-year 500 million cedi ($127.2 million) domestic bond this week, as it seeks cheaper sources of funding to support its budget and restructure debt, the central bank and arrangers of the deal said on Monday.

Thursday's bond will be sold through the book-building system that mainly targets institutional investors and offshore buyers, the arrangers told Reuters.

They did not disclose any details on pricing, but interest rates in Ghana are among the highest in the region, reflecting the fiscal challenges it faces. The yield on its benchmark 91-day treasury bill stood at 22.8160 percent on June 17.

The world's second largest cocoa producer and Africa's no. 2 gold miner has turned to the IMF for help to fix an economy dogged by a high public debt and inflation, securing a 3-year assistance programme.

Ghana raised 746.4 million cedis ($193 million) in a similar local bond transaction in March for a yield of 24.75 percent. It has also issued several other securities, including ones of 3-year maturity.

The West African nation, which is due to hold elections in November, also has plans to issue Eurobonds of up to $1 billion, amid concerns from the IMF about the country's public debt, which stood at $26.3 billion, or 70 percent of GDP, at the end of December.

The government has appointed Standard Chartered Bank, Citibank and Merrill Lynch as advisors for the Eurobond, the fifth since the country's 2007 debut.

Unlike last year when the local cedi depreciated more than 30 percent to the dollar, it has withstood the downward pressure this year. It was trading at 3.93 to the greenback by midday on Monday, down 3.4 percent since the start of the year.