Home Business GHS 1.43 billion raised from short-term debt security by the central bank

GHS 1.43 billion raised from short-term debt security by the central bank

by Vesta Daily
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GHS 1.43 billion is raised from short-term debt security by the central bank.

The Bank of Ghana (BoG) has effectively raised a significant sum of GHS 1.43 billion by issuing its banknotes, which are appropriately titled Bank of Ghana (BoG) bills.

The 56-day maturity bill, which is purposefully used by the Central Bank to meet short-term finance needs and directly support government spending, was the subject of the December 13, 2023, auction.

Information on the size of the bids from asset management companies and commercial banks is not released. There is a degree of confusion surrounding the auction’s aftermath due to the lack of complete information regarding the total bids and the achievement of the Central Bank’s projected issuance.

The auction results report does highlight one significant finding, though: the notes were sold at a noticeable interest rate of 29.9 percent.

The Central Bank bill serves as a key component of Open Market Operations (OMO) and is a crucial tool for monetary policy, enabling the Bank of Ghana (BoG) to carefully control the money supply. Designed specifically to regulate the dynamics of liquidity in the Ghanaian banking system, these short-term securities are sold via primary auctions.

The interest rate that is assigned to the Central Bank bill is of great importance and has a significant impact on the overall monetary policy position. The Central Bank bill, which has fixed maturity periods ranging from 14 to 182 days, is a flexible tool that allows the Bank of Ghana (BoG) to skillfully navigate and construct the monetary environment of Ghana.

Vesta Daily
Author: Vesta Daily

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