Bank of Ghana Remains Focused on Achieving 8% Inflation Target– Dr. Leandro Medina


Dr. Leandro Medina, the International Monetary Fund (IMF) Resident Representative in Ghana, stated that the Bank of Ghana’s efforts to guide inflation back to its 8 percent target are not hindered by its participation in the Domestic Debt Exchange Programme (DDEP). The BoG’s involvement in the DDEP is part of a strategy to share the burden placed on the government and banks.

In an interview with the B&FT newspaper, Dr. Medina explained that the IMF’s analysis indicated that the BoG can effectively execute its policy mandates, including bringing inflation back to its target gradually. He also mentioned that the BoG’s net equity is expected to improve over time and eventually become positive again.

The BoG recently reported a loss of GH¢60 billion, attributing it to the depreciation of the local currency, impairment of loans and advances, and the impairment of the government’s securities holdings resulting from the Domestic Debt Exchange Programme. The IMF reiterated these reasons for the loss.

In a recent statement, the International Monetary Fund (IMF) addressed the $3 billion bailout and provided answers to frequently asked questions. The Fund acknowledged that the Ghanaian authorities’ domestic debt exchange (DDE) plays a crucial role in their efforts to restore macroeconomic stability and ensure public debt sustainability.

The IMF highlighted that the Bank of Ghana (BoG) is participating in the DDE to share some of the burden that it places on government debt holders, banks, financial institutions, pension funds, and individuals. However, this participation has resulted in a loss for the BoG, resulting in a negative net equity. Despite this, the IMF emphasized that the BoG will still be able to fulfill its policy mandates and work towards achieving the 8-percent inflation target.

The IMF also reassured that the central bank’s income is expected to be sufficient to cover the operational costs related to monetary policy. Furthermore, they projected that the BoG’s net equity will improve significantly over time and eventually return.


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Ngamegbulam C. S

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