The First Deputy Governor of the Bank of Ghana (BoG) Maxwell Opoku-Afari has disclosed that government adopted a “whatever it takes” stance to minimize the impact of the pandemic on Ghana’s economy.
He said the policy stance culminating in some GHc21 billion being spent on Covid-19 last year.
Speaking at a workshop organised by the Journalists for Business Advocacy (JBA) under the theme, “Understanding the Monetary Policy in a Post Pandemic Era”, the First Deputy Governor noted that the Bank deployed various tools such as the interest rate tool, macroprudential policies, market liquidity support, and the purchase of a Government COVID-19 Bond.
To help close the residual financing gap of the budget arising from increased COVID-related spending and to prevent an inefficient tightening of domestic financial conditions arising from market conditions, Mr Kojo-Afari added that the BoG utilised its policy space from gains of over three years of strong monetary policy reforms, by triggering the emergency clause of the BOG Act to allow the Bank purchase Government of Ghana COVID-19 relief bond (GH¢10 billion) in line with provisions of the BOG Act 2002 (Act 612) as amended Act 918.
In addition, he said following the announcement of the measures by the BoG, Deposit Money Banks also provided various reliefs to customers through reduction in lending rates, granted moratoria on loan repayments, restructured existing facilities, and advanced new loans to customers. “Broadly, these actions have helped to moderate the economic impact of COVID-19 on customers and minimised the potential disruptions in credit flows.”
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Ghana’s economy, according to him, is entering a new phase of its macroeconomic developments with low inflation and well-anchored expectations. “The Bank of Ghana will continue to pursue prudent policies to safeguard its primary objective of price stability. The Bank’s inflation forecast strongly the low inflation expectations going forward.”
He indicated that some policy and regulatory interventions were further adopted similar to those implemented elsewhere in the world.
The First Deputy Governor stressed that the central bank will continue to implement policies consistent with its inflation targeting framework to entrench the current low inflation environment.
