The Bank of Ghana (BoG), has raised some Ghs 1.08 billion in the auction of its own bills on Wednesday, May 26, 2021.
The auction made on Wednesday, follows an earlier auction made on May 24, 2021, in which the Central Bank raised some Ghs 5 million.
The Ghs 1.08 billion raised represents a more than 200 times subscription to the Central Bank bills by authourised primary dealers – commercial banks.
BoG bills in the first round were auctioned at a discounted rate of 14.41 percent.
The 14-day BoG bill which saw the Central Bank raise a little over Ghs 1 billion was also auctioned at a discounted rate of 14.41 percent.
Per the auction results released by the BoG, it is unclear the value of bids made by the various authourised primary dealers involved in the auction as well as whether the Central Bank was able to meet its target with the auctions of its bills as both amounts were not stated by the BoG.
Central Bank bills mostly employed through Open Market Operations (OMO), serves 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 through selling short-term securities on the primary market.
In most cases, funds raised from the auction of Central Bank bills are directly loaned to government to support its short term needs.