The governor of the Bank of Ghana (BoG), Dr. Ernest Addison, has raised concern regarding the solvency of some Ghanaian institutions.
He claims that the Central Bank will take action to ensure that banks maintain their financial stability.
He claimed that this is the Central Bank’s most significant responsibility.
The BoG’s decision comes as the government gets ready to restructure its debt in order to clear the way for an IMF bailout.
Bondholder haircuts will be part of this.
At a press conference, Dr. Ernest Addison stated: “The good news is that we believe there are appropriate buffers.
However, the Central Bank will implement measures to guarantee the banks’ continued viability.
On the subject of Ghana’s galloping inflation, the Governor said, “The inflation forecast shows that inflation will likely peak in the first quarter of 2023 and settle around 25% by the end of 2023. This forecast is conditioned on the continued maintenance of the tight monetary policy stance and the deployment of tools to contain excess liquidity in the economy.”
He noted that there are some risks associated with inflation such as additional pressures from the proposed VAT increase in the exchange rate have to be monitored.
Dr. Addison added that “to continue to anchor inflation expectations, the committee, therefore, decided to increase the policy rate by 250 basis points to 27%.”