BoG issues GHS 814 million debt
The Bank of Ghana has auctioned short-term debt instruments worth some GHS 814m.
The auction of the debt instruments with a maturity period of 56 days took place on Monday, March 4, 2024.
The short-term debt instruments known as BoG Bills were auctioned at an interest rate of 29%.
Central Bank bills – in this case BoG Bills – mostly employed through Open Market Operations (OMO), serve as a monetary policy tool used by Central Banks to regulate money supply in an economy.
The main function of Central Bank 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 the 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 rate being paid by the Central Bank is way too high. BoG should pay 22% max.