The Bank of Ghana recently raised GHS 1.6 billion through the issuance of its own bills, known as Bank of Ghana (BoG) bills with a maturity period of 56 days.
The auction, which took place on January 31, 2024, saw the central bank selling short-term securities on the primary market to regulate money supply and manage liquidity in the banking system.
The interest rate at which the BoG bills were auctioned stood at 28.99 percent.
While the value of bids made by primary dealers was not disclosed, the auction outcome highlights the central bank’s ability to attract funding from the domestic financial market in support of its monetary policy objectives.
The BoG bills are typically used in Open Market Operations (OMO), which are a monetary policy tool used by central banks to manage money supply.
Through OMO, the central bank can influence the cost and availability of credit in the economy by adjusting the supply of money in circulation.
It is worth noting that the funds raised from the auction of the BoG bills are often loaned directly to the government to support its short-term needs.
This suggests that the Ghanaian government may have borrowed the funds from the central bank to finance its budget or other obligations.
Source:norvanreports