THE Governor of the Bank of Ghana (BoG), Dr Johnson Asiama, said one of his priorities is the need to reverse the Bank’s negative equity position to positive in the medium term to maintain financial stability, credibility, and public trust.
In this vein, he mentioned, would seek to re-examine the Bank’s non-core operations where savings could be made.
Dr Asiama made the pledge in Accra on Tuesday when he was sworn into office by the President, John Dramani Mahama.
The BoG took the biggest haircut as part of the debt restructuring exercise in 2023 to ensure debt sustainability and macro stability.
“We shall adopt several austere measures to help reduce the Bank’s operational costs and achieve cost efficiency,” he stated, adding that “the BoG would craft very clear policies to improve its equity position.”
The Governor stated that the reset agenda of the government was about stabilising the macroeconomy and addressing key issues such as high inflation, persistent fiscal deficits, and excessive debt levels.
“The reset path the government has embarked on is more than mere sloganeering, stressing it was about restoring public trust, rebuilding confidence, and ensuring that Ghana’s economy is stable, innovative and ready for the future,” Dr Asiama explained.
He said achieving economic stability would require monetary and exchange rate policy reforms, fiscal austerity measures, and debt restructuring to reduce fiscal risks and create a stable economic environment.
“Indeed, the Bank of Ghana is a key institution in this agenda to reset the economy and must remain steadfast in its mission to maintain price stability, ensure a sound financial system, and support economic growth,” Dr Asiama stated.
Again, he noted that through responsible financial sector governance, digital transformation, and sound economic policies, the BoG would create an economic and financial system that was transparent, predictable, and stable.
In line with the mandate and confidence reposed in him, Dr Asiama said his focus would be on six priority areas to engender macroeconomic stability and growth of the economy.
He mentioned them as the need to recalibrate monetary policy strategy and enhance the policy framework, the need to preserve exchange rate stability and limit excessive volatility in the rates, realign regulatory mandate to promote greater levels of financial intermediation to support economic growth, boost financial inclusion and innovation to promote inclusive economic growth, reduce poverty, empower individuals, and ensure the stability and competitiveness of the financial system.
Dr Asiama further said his priority would be the need to promote greater fiscal and monetary policy coordination while maintaining our operational independence.
“Under my leadership, our policies will be clear, predictable, and responsive to emerging threats,” the Governor stated.
Dr Asiama said under his tenure, the BoG shall adopt a more proactive and precise approach to managing inflation, leveraging on advanced data analytics and artificial intelligence.
“Also, we shall coordinate policy efforts with other government agencies for example to manage food prices,” he stressed.
He said the BoG would be consistent in its policy actions to avoid sending conflicting signals as happened in the recent past, and work to enhance monetary policy implementation.
“Among others, we shall, pursue reforms in the inflation targeting framework to foster more transparency and enhance the effectiveness of monetary policy implementation, discontinue the use of differentiated cash reserve requirements, and instead rely on open market operations (OMOs) to manage liquidity conditions, and improve the Bank’s communication regime and ensure regular dialogue with banks on regulatory matters.
Moreover, Dr Asiama indicated that the BoG was confident that the current levels of inflation would l gradually trend back to target range and within the forecast horizon.
The Governor noted that he would work to preserve exchange rate stability and limit excessive volatility in the rates.
BY KINGSLEY ASARE
