Central bank manages liquidity with 14-day debt instrument
The Bank of Ghana (BoG) has issued a short-term debt instrument worth GHS 4.38bn ($764m) with a maturity period of 14 days, according to a notice from the central bank.
The instrument, which was issued on Wednesday, January 18, mobilised a total amount of GHS 4.38bn at an interest rate of 27%, reflective of the BoG’s current monetary policy rate.
Bids for the BoG bill were mainly tendered by various commercial banks and other institutional investors in the country.
The bills are mainly employed through Open Market Operations (OMO) 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 by selling short-term securities on the primary market.
Funds raised by the BoG through its bills are typically loaned to the government to finance its short-term financing needs.
This latest debt issuance by the BoG comes as the country continues to grapple with the economic impact of the Covid-19 pandemic.
The central bank has been using a range of monetary policy tools to support the economy, including including increasing interest rates to rein in rising inflation.
