The International Monetary Fund (IMF) has justified the Bank of Ghana’s (BoG) GH¢60 billion loss during the 2022 fiscal year.
According to the IMF, there is no cause for alarm.
The Minority Leader, Dr. Cassiel Ato Forson has asked the governor if the central bank to resign in 21 days or the NDC will mobilise Ghanaians to march ro the headquarters of the bank and force him and his deputies out.
He opined that the governor and his deputies have been reckless in managing the affairs of the bank.
But the IMF has jumped to the defence of the BoG explaining that the BoG suffered losses because it participated in the Domestic Debt Exchange Programme (DDEP), which was a key element of the government’s plan to restore macroeconomic stability and public debt sustainability.
“The BoG is participating in the DDE to share some of the burden the DDE places on government debt holders, along with banks, other financial institutions, pension funds and individuals,” IMF said.
The IMF said the loss the BoG incurred in the process contributed to reducing its net equity to a negative value.
The IMF further noted that the situation should not prevent the BoG from fulfilling its policy mandates and ensuring inflation gradually returns toward its 8% target.
It said the central bank income was expected to be sufficient to cover monetary policy operational costs, and as such, the BoG’s net equity was expected to improve significantly over time and eventually return to positive territory.
Read the full post from the IMF below
Why did the Bank of Ghana (BoG) incur losses from the authorities’ domestic debt exchange and what are their implications?
The Ghanaian authorities’ domestic debt exchange (DDE) is a key element of their plan to restore macroeconomic stability and public debt sustainability. The BoG is participating in the DDE to share some of the burden the DDE places on government debt holders, along with banks, other financial institutions, pension funds and individuals.
The loss the BoG incurred in the process has contributed to reducing its net equity to a negative value. Importantly, however, this does not prevent the BoG from fulfilling its policy mandates and ensuring inflation gradually returns toward its 8-percent target. Indeed, central bank income is expected to be sufficient to cover monetary policy operational costs. The BoG’s net equity is expected to improve significantly over time and eventually return to positive territory.
By: Rainbowradioonline.com/Ghana
