The Bank of Ghana (BoG), has raised some GHS 3.92 billion in debt from the issuance of its own bill.
The BoG bill with a maturity period of 14 days was auctioned by the Central Bank on Wednesday, January 25, 2023.
Per the auction results released by the BoG, it is unclear the value of bids made by commercial banks for the Central Bank bill as well as whether the BoG was able to meet its target with the auction of its bill as both amounts were not stated by the BoG.
The bill however, was auctioned at an interest rate of 27 percent.
Central Bank bills mostly employed through Open Market Operations (OMO), serves as a monetary policy tool used by Central Banks to regulate money supply.
The main function of Central Bank bills is to manage the liquidity of the banking system through selling short-term securities on the primary market.
Funds raised from the auction of the bills are usually loaned to the government to meet its short-term financing needs.
The interest rate on the Central Bank bills is the key interest rate that determines the monetary policy stance or rate. The bills usually have fixed maturities of 14, 28, 63, 91 and 182 days.
Source: norvanreports.com