BoG borrows GHS 700m in 14-day bill at 19% interest rate
The Bank of Ghana (BoG), through the issuance of a 14-day BoG bill on Wednesday, May 25, 2022 borrowed some GHS 700m from the domestic market.
The short term security was issued at an interest rate of 19% to investors.
Compared to the same security which was issued on May 4, 2022 (at an interest rate of 16.8%), the new interest rate marks a 2.2% increment.
The hike in the interest on the BoG Bill reflects the 250 basis points hike in the policy rate by the Central Bank in March this year.
The BoG bills, mostly employed through Open Market Operations (OMO), serves as a monetary policy tool used by Central Bank to regulate money supply in the economy.
The main function for the issuance of the bills is to manage the liquidity of the banking system through selling short-term securities on the primary market.
In most cases, funds raised from the auction of the BoG bills are directly loaned to government to support its short term 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 28, 63, 91 and 182 days.
Peruse auction results:
BOG Auctresults 656 WED 25 MAY 22 1 by Fuaad Dodoo on Scribd
