This week, the Monetary Policy Committee (MPC) of the Bank of Ghana is meeting in what many believe is a peculiar period. This MPC meeting comes on the heels of two loud decisions of the central bank.
In less than a month the BoG sanction the takeover of two banks by the country’s largest networked bank – the Ghana Commercial Bank – and also announced the that it has raised the minimum capital for universal banks from GHC120 million to GHC400m. This is to be met by end of 2018.
In the wake of these decisions, there is a lot of expectation ahead of the MPC’s 78th regular meeting which would hold on Friday, September 22, 2017 to review developments in the economy.
“This will be preceded by a Pre-MPC session on Wednesday September 20, 2017. The MPC meetings will conclude with a press conference on Monday September 25, 2017 to announce the decision of the Committee,” the BoG said in the statement.
Given that events leading to this meeting have led to all manner speculations, Mr. Martin Ofori, chief executive officer (CEO) of Crystal Capital & Investments Limited, is urging the MPC to give a clear message about the state of the financial sector.
“I think that first of all they should consider the monetary condition of the financial system. It’s a critical one. I know they have the monetary condition index that they track. I know they have the financial fragility index that they also consider.
“Because it is a topical issue, it is possible for them to consider the extent of financial fragility or the strengths of the financial system and give a clear communication,” Mr. Ofori told Business Day last Thursday.
He continued: “I believe the financial system is quite robust and they should be able to consider all the variables that point to robustness and communicate clearly to the public about it to gain confidence or, let me say, to maintain the confidence of the people in the system.
“And of course, it is not just the financial system. They look at the entire economy – all the economic variables. Definitely, they have to look at the macro stability,” he said.
Meanwhile, he recognises the task that the central bank has. “You see, the central bank has a very critical task – the primary task is price stability but unfortunately the central bank is still tasked with an objective of ensuring growth. And these two issues have trade-offs, you understand? But unfortunately, they have to consider these two trade-offs. So, yes, we want to know the growth considerations but we also want to know the stability considerations.”