BoG steps up liquidity control as inflation records second monthly increase

The Bank of Ghana (BoG) has intensified efforts to control liquidity in the economy after withdrawing GH¢11.28 billion from the banking sector through its latest 14-day bill auction.

The move comes at a time when inflation, although still relatively low, has recorded two consecutive monthly increases, raising concerns about potential price pressures in the months ahead.

According to the central bank's latest auction results released on Wednesday, June 3, 2026, the bank subscribed GH¢11.28 billion to the short-term instrument, allowing the Bank of Ghana to remove a substantial amount of excess cash from circulation.

This forms part of the central bank's broader strategy to ensure that liquidity levels in the financial system remain consistent with its inflation and monetary policy objectives.

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However, unlike Treasury bills, which are released by the government to raise funds for budgetary spending, Bank of Ghana bills are used specifically to regulate money supply and influence conditions in the money market.

The latest liquidity withdrawal suggests the central bank is maintaining a cautious stance despite improvements in key economic indicators over the past year.

Inflation increased to 3.7 percent in May 2026 from 3.4 percent in April, marking the second consecutive rise after months of steady decline. Although the rate remains significantly lower than levels recorded a year ago, policymakers appear keen to prevent excess liquidity from triggering renewed inflationary pressures.

The auction attracted bids ranging between 10.40 percent and 11.00 percent, with all successful bids accepted. The weighted average interest rate settled at 10.93 percent.

The development also follows the Monetary Policy Committee's decision to keep the policy rate unchanged at 14 percent, noting the central bank's determination to preserve recent macroeconomic gains while supporting economic activity.

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