BoG’s current financial position will not affect monetary policy operations – IMF

The International Monetary Fund (IMF) jumped to the Bank of Ghana (BoG)’s defence insisting the regulator’s current financial position will not affect monetary policy operations.

IMF has maintained that the Bank of Ghana’s current financial position will not affect monetary policy operations and mandate.

This was captured in an update issued by the IMF on Ghana’s programme with the Fund.

The IMF in its latest Question and Answer on Ghana’s Programme noted that despite the Bank of Ghana’s challenging financial position, this will not prevent the central bank from fulfilling its policy mandate and ensuring that the inflation rate gradually returns towards its 8 per cent target.

The IMF adds that the Central Bank’s income is even expected to be sufficient to cover Monetary Policy operational costs.

It also disclosed that the BoG’s net equity is expected to improve significantly over time and eventually return to positive territory.

It also admitted that the Bank of Ghana’s heavy participation in the Domestic Debt Exchange Programme (DDEP) did contribute to its negative equity.

On Domestic Debt Exchange Programme, the IMF revealed that it finalised the second round of exchange, that is the cocoa bills, domestic dollar bonds and pension funds, should finally bring an end to the process when it comes to the domestic debts.

However, regarding the status of the external debts, the IMF revealed that the next step is the Official Creditor Committee for Ghana, under the G20 Common Framework, to reach an agreement with the authorities on the specific modalities of how official creditors intend to deliver debt relief consistent with Fund-program parameters.

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