The Bank of Ghana absorbed a combined GH¢21.41 billion from the financial system this week through two separate tenders, stepping up liquidity management operations just days before its 132nd Monetary Policy Committee (MPC) meeting, where the central bank is expected to announce its next policy rate decision.
The first tender, held on Monday, saw the central bank accept the full GH¢13.71 billion offered at an interest rate of 10.5 per cent. A second tender conducted on Wednesday resulted in a further GH¢7.7 billion being absorbed at the same rate.
Both operations involved the issuance of 14-day Bank of Ghana Bills, through which the central bank temporarily sterilises excess liquidity held by banks and other participating financial institutions. Because the instruments carry a 14-day maturity, the funds are only temporarily sterilised, allowing the central bank to influence short-term liquidity conditions while retaining the flexibility to release the funds back into the system as the bills mature.
Timing Ahead of MPC Decision
The timing of the liquidity absorption comes just days before the Bank of Ghana’s 132nd Monetary Policy Committee meeting, scheduled for September 22 to 24, with the policy decision expected on Thursday, September 24. The September meetings will start on Tuesday, September 22, due to the public holiday on Monday, September 21.
The scale of the combined operations highlights the Bank of Ghana’s continued focus on managing liquidity conditions in the financial system, a key component of monetary policy transmission. The intervention could have implications for short-term money-market conditions, bank liquidity and funding costs, depending on how participating institutions adjust their balance sheets and liquidity positions.
The central bank has previously indicated that liquidity management and sterilisation remain important tools in maintaining the appropriate monetary policy stance. Its latest monetary policy report identifies sterilisation efforts as part of the measures supporting the inflation outlook.
Policy Rate Decision Awaited
Attention now turns to how the sizeable liquidity absorption will affect money-market rates and bank liquidity in the days leading up to the MPC meeting, and what signal the committee will send on the policy rate.
The Bank of Ghana maintained its policy rate at 14 per cent at its last meeting in July 2026, citing rising external risks to inflation despite continued strength in the domestic economy. Governor Dr Johnson Asiama, who chaired the committee, said recent inflation developments remained broadly in line with forecasts, although headline inflation increased in June due mainly to temporary factors.
Market analysts are divided on the likely outcome. Databank Research projects a 150-basis-point cut to 12.5 per cent, citing continued moderation in inflation toward the Bank of Ghana’s medium-term target range of 8 per cent ±2 per cent. The firm noted that Ghana’s monetary policy remained on a cautious easing trajectory during the first half of 2026, with the first reduction in March 2026 lowering the policy rate to 14.0 per cent.
IC Insights, however, expects the MPC to retain the policy rate at 14 per cent, arguing that a real policy rate of 9.0 per cent suggests room for a modest cut but that the committee would likely preserve policy headroom to accommodate any unexpected spike in inflation.
Background on Liquidity Management
The Bank of Ghana has conducted similar liquidity absorption operations throughout 2026. In June, the central bank absorbed GH¢24.80 billion through 14-day bills during Tender 865, conducted on June 10, 2026. Earlier, in February, it recorded a strong uptake at its Tender 847, selling GH¢16.22 billion worth of 14-day bills.
Data compiled by Black Star Analytics showed that the central bank absorbed approximately GH¢168.9 billion through open market operations in May 2026, more than double the average monthly absorption of GH¢81.6 billion seen in March and April.
About the Governor
Dr Johnson Pandit Asiama was appointed Governor of the Bank of Ghana by President John Dramani Mahama in January 2025, following the retirement of Dr Ernest Addison. He previously served as Second Deputy Governor of the Bank of Ghana between 2016 and 2017 and has worked at the central bank for over 23 years.
He holds a PhD in Economics from the University of Southampton, UK, an MPhil in Economics from the University of Ghana, Legon, and attended St. Peter’s Secondary School in Nkwatia and Bishop Herman Secondary School in Kpando. Before his appointment as Governor, he served as Director of the Macroeconomic Management Department at the West African Institute for Financial and Economic Management (WAIFEM).
The MPC’s September decision is expected to weigh the need to sustain economic activity against the risk of renewed inflationary pressures, with the liquidity operations this week serving as a prelude to the committee’s deliberations.
