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Governor of the Bank of Ghana, Dr Ernest Addison has underscored the resilience of the central bank in supporting the economy during the 2022 crisis.
According to him, the yeoman job done by BoG deserves “applause” from Ghanaians and not the severe attacks.
Mr. Addison made the pronouncement when speaking at the Governor’s Day organised by the Chartered Institute of Bankers.
“It is important to remind ourselves, as players in the global economy, that the crisis that hit the Ghanaian economy in 2022 was like what pertained in many other frontier and emerging market economies, including Egypt, Argentina, Turkey, Kenya, Sri Lanka, and Pakistan, just to mention a few.
“These countries, except for Sri Lanka, had built policy buffers and the resilience of their key institutions provided the needed anchor to hold their economies until reform packages were introduced,” he said.
He stressed that despite all efforts to stabilize the economy, they have come under unwarranted attacks.
“The Bank played a critical role to support the economy during the crisis period with distinction. It is very clear the bank’s role in supporting the economy through this crisis has not been fully understood and in some cases deliberately misinterpreted. The Bank came under severe attack across the media space, culminating in an organised demonstration against the institution.
“Ladies and Gentlemen, central banks all over the world have had to re-evaluate their mandate since the global financial crisis of 2007/2008 and have supported fiscal policy to play a countercyclical role in stabilizing economies.
“Consequently, central banking has never been the same. Before the financial crisis, the quintessential task of central banks was straightforward, keeping inflation within a tight range through the control of short-term interest rates. In a world of poly-crisis, central banks have found themselves broadening monetary policy formulation beyond interest rates to include the deployment of balance sheets in a variety of unconventional monetary policies,” Dr. Addison said.
He further added that “In the 2020 pandemic, the Central Bank supported the financing of the budget to protect lives and livelihoods” recalling that in the 2022 economic and liquidity crisis, the Central Bank would not have acted differently but played its role as an automatic stabilizer to avoid pushing the economy to a tipping point which possibly could have spilled into social upheavals as was the case in Sri Lanka.”
“It is very clear that only a Central Bank that has been prudently run, built buffers, and well positioned, can step in to support an economy from collapse. It is therefore most appropriate, I believe, to state that Ghanaians should rather applaud and commend the resilience of the Bank of Ghana,” the BoG Governor stated.
