The IMF Resident Representative in Ghana, Dr. Leandro Medina
The IMF Resident Representative in Ghana, Dr. Leandro Medina, has said the Bank of Ghana’s participation in the government’s Domestic Debt Exchange Programme contributed to reducing its net equity to a negative value.
According to him, the Central Bank’s participation in the debt swap forms part of efforts to share some of the burden the DDEP places on government
Read full article.debt holders, along with banks, other financial institutions, pension funds and individuals.
Speaking in an interview with the B&FT newspaper, Dr Medina noted that an analysis conducted by Fund showed that “this situation does not hinder the BoG from effectively executing its policy mandates, including the vital task of guiding inflation back to its 8-percent target in a gradual manner”.
“Fundamentally, the BoG’s net equity is expected to improve over time, ultimately resulting in a return to positive territory,” the IMF resident representative for Ghana added.
Meanwhile, the Central Bank has occasionally explained that it had to take the majority of the haircuts associated with government's debt swap which was launched in December 2022.
The Bank said it had to take close to 50 percent of the haircuts which culminated in a huge portion of the impairment loss of GH¢60 billion recorded in the 2022 financial year.
But the Central Bank has pledged that its balance sheet would not be affected in the second round of the DDEP which is targeting US dollar-denominated bonds, pension funds and cocoa bills.
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The IMF Resident Representative in Ghana, Dr. Leandro Medina
