The International Monetary Fund
The International Monetary Fund (IMF) has justified the Bank of Ghana’s GH¢60 billion impairment loss recorded in the 2022 fiscal year.
The Bretton Wood institution in a post captured on its website about Ghana on August 10, 2023 said there is no cause for alarm.
It upheld the position
Read full articlethat the Bank of Ghana suffered the losses due to its participation in government's Domestic Debt Exchange Programme (DDEP) which forms part of efforts to address debt sustainability and restore and macroeconomic stability.
The IMF however called on the Bank of Ghana to ensure its policy mandates are upheld and implement stringent measures to tame inflation back to its designated target of 8-percent.
Below is what the IMF said about BoG’s impairment loss in 2022
Why did the Bank of Ghana (BoG) incur losses from the authorities’ domestic debt exchange and what are their implications?
The Ghanaian authorities’ domestic debt exchange (DDE) is a key element of their plan to restore macroeconomic stability and public debt sustainability. The BoG is participating in the DDE to share some of the burden the DDE places on government debt holders, along with banks, other financial institutions, pension funds and individuals.
The loss the BoG incurred in the process has contributed to reducing its net equity to a negative value. Importantly, however, this does not prevent the BoG from fulfilling its policy mandates and ensuring inflation gradually returns toward its 8-percent target. Indeed, central bank income is expected to be sufficient to cover monetary policy operational costs. The BoG’s net equity is expected to improve significantly over time and eventually return to positive territory.
MA/NOQ
