The Bank of Ghana (BOG) has clarified that its significant financial loss of GH₵10.5 billion for the 2023 fiscal year does not reflect a failure in policy effectiveness.
The Central Bank explained that a substantial portion of this loss, GH₵8.3 billion, was due to open market operations aimed at controlling inflation, a significant increase from GH₵1.7 billion in 2022.
In an interview with Citi Business News, Director of Communications at the Central Bank, Bernard Otabil emphasized that the BoG’s actions to curb inflation bolster their credibility despite the financial setback.
“Central banks focus on national welfare rather than profits. For the Bank of Ghana, headline inflation dropped from a peak of 54.1% at the end of December 2022 to 23.2% by December 2023,” Otabil explained.
He noted that the increased expenditure on open market operations reflects a fivefold rise in efforts to absorb liquidity from the economy to reduce inflation. Despite a lower revaluation loss and exchange difference charge due to slower currency depreciation, the GH₵4.27 billion recorded still significantly contributed to the overall loss of GH₵10.5 billion.
Otabil reiterated that the 2023 financial results highlight the Central Bank’s dedication to price stability and the economic welfare of Ghanaians.
“The Bank of Ghana remains committed to policies aimed at achieving a stable inflation rate, targeting 8% with a tolerance of plus or minus 2 percentage points. Lowering inflation to this target is crucial for sustainable economic growth and prosperity, and it also helps maintain exchange rate stability under our floating currency regime,” he added.