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Dr. Ernest Addison, the governor of the Bank of Ghana (BoG), has expressed worry about the solvency of some Ghanaian banks.
According to him, the Central Bank will put in measures to ensure that banks remain solvent. This, he said is the most important task of the Central Bank.
The decision by the BoG comes as the government prepares to restructure its debt to pave way for an International Monetary Fund (IMF) bailout. This will include haircuts to bondholders.
Dr. Ernest Addison explained at a media briefing that: “The good thing is that we think that there are adequate buffers. Nevertheless, the Central Bank will put in measures that will ensure that the banks remain solvent.”
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%.”
