- BoG Mops Up GH¢8.48 billion in 14-Day Bills as Liquidity Absorption Falls Sharply
The Bank of Ghana has withdrawn GH¢8.48 billion from the financial system through its latest 14-day bill auction, with short-term rates remaining firmly anchored around 10.50% even as the volume of liquidity absorbed dropped sharply from recent operations.
Results of Tender 873, held on Wednesday, August 5, 2026, show that the central bank sold GH¢8,478.44 million through its 14-day Bank of Ghana bill, continuing its use of short-tenor securities to manage liquidity conditions in the banking system.
The instrument attracted annualised bid rates ranging from 10.40% to 10.46%, with bids within the same range allotted in full. The weighted average discount rate settled at 10.46%, while the corresponding weighted average interest rate was 10.50%.
While the interest-rate outcome was broadly unchanged from recent auctions, the amount absorbed represents a significant moderation in the scale of the Bank of Ghana’s liquidity sterilisation.
At Tender 872 on July 27, the central bank sold GH¢16.57 billion in 14-day bills at a weighted average interest rate of about 10.50%. The latest GH¢8.48 billion sale therefore represents a 48.83% reduction in the amount withdrawn compared with that operation.
The August 5 amount was also 8.37% below the GH¢9.25 billion absorbed at Tender 871 on July 22 and 27.41% below the GH¢11.68 billion sold at Tender 870 on July 15. Earlier in July, the central bank had withdrawn GH¢14.42 billion through its 14-day bill on July 6.
That decline in auction volumes is potentially more informative than the largely unchanged yield.
Bank of Ghana bills are not issued to finance government expenditure in the manner of conventional Treasury bills. They are monetary-policy instruments used by the central bank to absorb surplus funds from the banking system, helping to manage short-term interest rates and prevent excessive liquidity from creating additional inflationary or foreign-exchange pressures.
The GH¢8.48 billion sale therefore represents liquidity that will, for the 14-day tenor of the instrument, effectively be taken out of immediate circulation within the financial system.
But the smaller size compared with recent auctions could reflect several possible dynamics.
It may indicate that the volume of excess liquidity requiring sterilisation has moderated, reducing the amount the central bank needs to absorb. It could also reflect changing liquidity positions among commercial banks following earlier large-scale withdrawals, government transactions, maturing securities or other money-market flows.
The auction result alone does not establish which of those factors is dominant, and the Bank of Ghana’s notice provides no explanation for the reduction in the amount sold. What is clear, however, is that the pace of liquidity withdrawal through this particular instrument was substantially smaller than in several recent auctions.
That makes the persistence of the roughly 10.50% interest rate particularly noteworthy.
Despite significant movements in auction volumes, pricing of the 14-day instrument has remained unusually stable.
On July 15, the weighted average interest rate stood at 10.50%, alongside GH¢11.68 billion in sales. The July 22 auction, which absorbed GH¢9.25 billion, cleared at a weighted average interest rate of 10.50%. The July 27 operation, when the Bank sold GH¢16.57 billion, also recorded an interest rate of about 10.50%.
The latest auction has maintained that pattern. This narrow pricing suggests that the central bank has succeeded in keeping very short-term money-market rates relatively stable even as the quantity of liquidity being absorbed fluctuates considerably.
There has, however, been a more visible decline when the current rate is compared with earlier periods of 2026.
On March 16, the Bank of Ghana sold GH¢19.44 billion in 14-day bills at a weighted average interest rate of 11.99%, according to official auction results.
By May 4, the weighted average interest rate had declined to 10.50%, with GH¢14.33 billion sold, and it remained near that level in mid-June when the Bank absorbed GH¢16.14 billion.
The trend therefore points to two developments occurring simultaneously: short-term sterilisation rates have eased from levels approaching 12.00% earlier in the year, while the Bank continues to absorb sizeable amounts of liquidity from the financial system.
When commercial banks hold significant excess liquidity, the transmission of the central bank’s policy stance can become less effective. Banks with surplus funds may increase lending, compete more aggressively for short-term assets or redirect money towards foreign exchange and other markets.
By offering 14-day securities, the Bank of Ghana can temporarily lock away some of those balances and maintain tighter control over money-market conditions without relying exclusively on changes in the Monetary Policy Rate.
The Bank pays interest to institutions holding its bills, meaning repeated and large-scale liquidity sterilisation carries financial implications for the central bank’s own balance sheet.
This issue has become increasingly relevant given wider debate about the cost of Bank of Ghana’s open-market operations and its financial position.
The size of an individual auction should therefore not automatically be interpreted as either monetary tightening or easing. What matters is the relationship between the liquidity being injected into the financial system from other sources and the amount subsequently being withdrawn.
For banks and institutional investors, meanwhile, the latest auction continues to offer a short-duration placement option carrying an annualised interest rate of around 10.50%, with funds committed for only two weeks.
The tight spread in bids between 10.40% and 10.46% also points to relatively settled expectations about where the Bank wants this segment of the money market priced.
The immediate market signal from Tender 873 is therefore less about rates than quantities.
The Bank of Ghana is still actively removing liquidity from the system, but it absorbed considerably less on August 5 than during several July auctions.
Whether that represents the beginning of a sustained decline in liquidity sterilisation requirements or simply reflects the normal ebb and flow of banking-sector cash positions will become clearer in subsequent tenders.
For now, one number remains remarkably stable amid those changing volumes: the 14-day Bank of Ghana bill continues to clear at almost exactly 10.50%.
