Dr. Johnson Asiama
The Bank of Ghana (BoG) has announced additional measures to manage the amount of money circulating in the country.
The Governor of the Bank of Ghana, Dr. Johnson Asiama, who disclosed this during a press conference at the 123rd Monetary Policy Committee (MPC) said the decision to increase the policy rate from 27% to 28% was aimed at maintaining macroeconomic stability and enhance monetary policy transmission.
“In addition to the adjustment in the policy rate, the Central Bank is implementing complementary measures to strengthen liquidity management and enhance monetary policy transmission,” he added.
“The Bank will introduce a 273-day instrument to augment the existing sterilization toolkit. Intensify the monitoring of banks’ Net Open Positions (NOPs) to ensure compliance. Review the current structure of the Cash Reserve Ratio (CRR) to assess its broader impact on liquidity conditions and financial intermediation in the economy,” he stated.
According to the governor, the measures were necessary to prevent excessive liquidity that will undermine efforts to reduce inflation as well as stabilise and protect the economy from unexpected shocks.
He further stated that the persistent inflation dynamics over the past year, partly driven by both fiscal and monetary policy missteps, will require a policy reset to re-anchor the disinflation process.
“To restore price stability going forward will require a tight monetary policy stance, strong liquidity management, and commitment to the 2025 budget which seeks to reset the fiscal consolidation process,” he added.
By Ebenezer K. Amponsah