The Governor of the Bank of Ghana (BoG), Dr. Ernest Addison has said various monetary policies will be tightened in 2023 to among other things address inflationary pressures in the country.
Delivering a speech at the 60th-anniversary launch of the Institute of Chartered Accountants, Ghana (ICAG), the BoG Governor said prudent macroeconomic policies will also be implemented to trigger a disinflation path and downward trends in the policy rate.
“With inflation currently at 54.1 percent, tight monetary policies are expected to contain the persistent price shocks in the economy and ease inflationary pressures. Monetary financing of the government deficit, which was pursued to prevent domestic defaults arising from systemic auction failures during 2022 will end under the programme.
“To achieve this, the Bank of Ghana and the Ministry of Finance will commit to zero financing of the budget in 2023 and beyond. The implementation of these prudent macroeconomic policies is expected to trigger a disinflation path and downward trends in the policy rate, as well as restore the country’s reserve buffers to at least 3 months of imports cover by end-2025,” Dr. Ernest Addison said.
The Governor of Bank of Ghana continued, “When inflation decelerates to single digits, we expect real interest rate of between 3-4 percent and nominal interest rates to range between 11-12 percent over the entire course of the programme.”
Dr. Addison further stresses that all projections hinge strongly on the successful attainment of an IMF programme.
In his address, the BoG Governor commended the Institute of Chartered Accountants, Ghana for the key role it played in the processes leading to the implementation of the Domestic Debt Exchange Programme.
“Your commitment and critical inputs to the entire process has helped to navigate this unchartered path and contributed to the implementation of the DDEP. Such collaborative efforts are critical for national development, and I am hopeful that in the near future, the Bank of Ghana will formally engage the Institute to help institutionalise and “nurture our partnership” to influence policy direction,” Dr. Ernest Addison stressed.