Skip to main content

Maintain a tight monetary policy stance – IMF to BoG

 


The International Monetary Fund (IMF) has urged the Bank of Ghana (BoG) to maintain a tight monetary policy stance given upside risks to inflation while doing more to advance the Fund’s advice on safeguards.

According to the Fund, a tight policy stance, supported by robust liquidity absorption operations, is warranted to ensure that inflationary pressures—stemming from the dry spell and the recent cedi depreciation—do not de-anchor inflation expectations while inflation gradually returns within the BoG target band.

In its country assessment of Ghana after the third review of the Economic Credit Facility programme, the Bretton Woods institution said continued progress in addressing the Fund’s safeguard assessment recommendations is needed to strengthen central bank independence and operational efficiency.

Rebuilding Reserves Key Priorities Under Programme

It continued that rebuilding international reserves and accelerating reforms to enhance BoG’s foreign exchange intervention framework remain key priorities under the programme.

The overperformance of reserves accumulation targets is welcome but mainly reflects a significant expansion of the gold for reserves programme, which warrants careful management of related portfolio risks and liquidity implications. Going forward, limiting FX [foreign exchange] interventions remains key to rebuilding external buffers”.

“The BoG made welcome progress in adopting a more robust FX reference rate computation method—which would limit the occurrence of MCPs [Multiple Currency Parctices]. Implementation of a formal internal FX intervention policy framework and replacement of bilateral adjudications with a transparent auction-based FX auctions—complying with MCPs policy requirements—are additional important steps to enhance the functioning of the FX market”, it added.

Steadfast and Decisive Progress Needed in Strengthening Financial Sector

The Fund also called for steadfast and decisive progress in strengthening the financial sector.

It pointed out that the BoG has appropriately intensified monitoring and escalated measures to promote timely recapitalization and steps to sustain the viability of banks.

However, it continued that progress is needed on this front as well as on the phasing out of regulatory forbearances. Given the high NPLs, the Fund added that it will also be crucial to implement robust supervisory strategies to bolster credit and operational risk management.

Comments

Popular posts from this blog

Nestlé Ghana Limited Wins Overall Best Industrial Company Of The Year at 13th AGI Industry & Quality Awards

  Nestlé Ghana Limited has been honored with four prestigious awards at the 13th Association of Ghana Industry and Quality Awards ceremony. The event, held in an esteemed setting, gathered prominent figures from Ghana’s industrial sector. Amidst the anticipation, Nestlé Ghana emerged as one of the evening’s notable winners, securing accolades in several key categories. This recognition underscores Nestlé Ghana’s relentless pursuit of excellence and innovation, marking a significant milestone that highlights the company’s substantial contributions to the manufacturing industry in Ghana. Nestlé Ghana's exceptional performance was acknowledged with the following awards: Overall Best National Quality Award, Diamond Category (Food) Overall Best Practices in Sustainable Manufacturing Best Company (Food Sector) Overall Industrial Company of the Year, affirming its status as a leader not only within the food sector but also across Ghana's entire industrial landscape. This success is a ...

Anglogold Ashanti Obuasi Mine tops 2024 Sustainability & Social Investment Awards

 AngloGold Ashanti Obuasi Mine has confirmed its status as sustainability champions by sweeping nine awards, the most won by a company at the 2024 Sustainability & Social Investment Awards (SSI) held at Movenpick Ambassador Hotel in Accra. The feat comes on the heels of a dominant performance in last year's event where AngloGold Ashanti Obuasi Mine swept seven awards. The SSI Awards organised by Ianmatsun Global Services recognizes the most outstanding sustainability, Corporate Social Responsibility (CSR), Environmental, social, and governance (ESG) initiatives in the country and beyond as well as the best teams and individuals who brought them to life. This year's event, which was the 8th edition, was under the theme "Climate Action Now: Accelerating Decarbonization and Building Resilience". The awards won by AngloGold Ashanti on the night include SSI Company of the Year, Best Company in Women Empowerment (project), SSI Company of the Year ( Environment), Best Co...

Zoomlion Advocates Community & Gender inclusive waste management for Climate Action at COP 29

 Africa's waste management giant, Zoomlion Ghana Limited has advocated for an integrated approach to waste management that considers the interest of community members, women and vulnerable groups. James Deku, a Communications Officer of Zoomlion Ghana Limited made this call at the 29th session of the Conference Of Parties (COP 29) of the United Nations Framework Convention for Climate Change (UNFCCC) at Azerbaijan, Baku whiles speaking on the topic "Community-Driven and Gender Inclusive approaches to waste management for Climate Action ". He said the waste sector is a major contributor of methane emissions which is a potent greenhouse gas causing climate change hence the need to manage waste in a manner that considers the interest of all stakeholders. Zoomlion's waste management model is designed and operated in a manner that considers the interest of all stakeholders. Through a Public Private Partnership (PPP) model, local authorities engage community members in clea...