The Bank of Ghana (BoG) absorbed GH¢19.06 billion from the domestic money market at its latest 14-day bill auction.
The short-term bills were allocated at a weighted average discount rate of 10.4579%, which translated into an effective interest rate of 10.50% for the investment period, according to the results of Tender 861, which was completed on May 11, 2026.
Bid rates for the auction ranged from 10.40% to 10.49%, with the majority of successful bids falling into this range.
The Bank of Ghana continues to utilize short-term instruments to control the money supply and stabilize short-term interest rates in the financial sector, as seen by the significant liquidity mop-up.
BoG bills are frequently used as a monetary policy tool to absorb excess liquidity from banks in order to stop surplus funds from causing volatility in the foreign exchange market or inflationary pressures.
The most recent operation takes place at a time when Ghana’s interest rate environment has drastically decreased due to recent monetary policy easing measures and persistent drops in inflation.
Even while macroeconomic indicators are improving, the size of the auction indicates the central bank is still wary of the liquidity situation in the banking industry.
At a time when yields on Treasury bills and other government assets have considerably decreased, the 14-day bill offers banks a comparatively low-risk short-term investment choice.
The Bank of Ghana’s aggressive liquidity management approach, which aims to fulfill its primary objective of preserving price stability, is further supported by the most recent auction.
Source: newsthemegh.com