BoG raises GHS 118m from auction of 56-day bill

The Bank of Ghana recently raised GHS 118.2 million through the issuance of its bill which has a maturity period of 56 days.

The auction which took place on December 4, 2023, saw the central bank selling the short-term securities on the primary market to help regulate money supply and manage liquidity in the banking system.

The interest rate at which the 56-day bill was auctioned stood at 30%.

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 monetary policy tools 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.

Moreover, the main function of central bank bills is to manage the liquidity of the banking system by selling short-term securities on the primary market. This helps the central bank regulate the amount of money in circulation and ensure financial stability.

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.

Source:norvanreports