The Bank of Ghana (BoG) has absorbed GH¢11.64 billion from the financial system through the sale of 14-day bills, as it continues efforts to manage excess liquidity in the banking sector.
The latest auction, Tender 872, held on July 29, 2026, saw the central bank allot bids at discount rates ranging from 10.40% to 10.46%. The corresponding interest rates ranged between 10.44% and 10.50%.
The weighted average discount rate settled at 10.45%, while the weighted average interest rate was 10.50%.
The sizeable amount raised highlights the level of liquidity available among commercial banks and other eligible financial institutions, which continue to place excess funds in short-term instruments issued by the central bank.
Unlike conventional government securities used to finance public spending, Bank of Ghana bills are primarily a monetary policy tool. The central bank uses them to temporarily remove excess cedi liquidity from the financial system, helping to manage pressures that could affect inflation, lending and the foreign exchange market.
The 14-day maturity also gives the BoG flexibility to withdraw liquidity for a short period and reassess market conditions regularly.
At 10.50%, the weighted average interest rate on the latest bills remains below the Bank of Ghana’s Monetary Policy Rate of 14%. The lower return is partly linked to the short maturity and relatively low risk associated with holding a central bank instrument for just two weeks.
The latest auction also recorded a significant decline in the amount absorbed compared with the previous 14-day bill sale on July 27, when the BoG sold GH¢16.57 billion.
The latest figure represents a reduction of about GH¢4.93 billion, or 29.75%.
The change could reflect shifts in liquidity levels across the banking system, settlement flows or the central bank’s assessment of how much excess liquidity needed to be withdrawn from the market.
The narrow range of bids submitted at the latest auction also suggests that market participants had broadly similar expectations about the appropriate return on the short-term securities.
With bids spanning only 0.06 percentage points, the weighted average rate of 10.50% remained close to the upper end of the range, pointing to relatively stable pricing conditions in the short-term money market.
For banks, central bank bills offer a relatively secure avenue for temporarily investing funds that are not immediately needed for lending, settlements or other obligations.
However, the continued strong demand for such instruments also raises questions about how much banking-sector liquidity is ultimately being channelled into loans for households and businesses.
Banks typically weigh factors such as credit risk, expected returns and customer demand when deciding whether to lend or invest in short-term securities.
If private-sector lending is considered risky or demand for credit is weak, banks may be more inclined to invest their excess funds in safer instruments such as central bank bills.
The BoG therefore faces the challenge of maintaining a balance. While withdrawing excess liquidity can help support price and exchange-rate stability, excessive tightening could limit credit growth and increase funding pressures on financial institutions.
The latest Tender 872 results show that there is still substantial demand for the central bank’s short-term instruments at rates around 10.50%.
