The Bank of Ghana has announced that it is taking extra steps to manage the amount of money circulating in the economy.
These measures according to the Governor, Dr. Johnson Asiama forms part of efforts to maintain macroeconomic stability and enhance monetary policy transmission.
Addressing the press at the Monetary Policy Committee’s press briefing following its 123rd regular meeting, BoG Governor, Dr. Johnson Asiama said the measures which come alongside the BoG’s decision to raise the policy rate to 28.0 percent, include the introduction of a 273-day financial instrument to help control the amount of money circulating in the economy.
According to the BoG Governor, the three additional measures include:
1. Introduction of a 273-day Instrument to expand the bank’s sterilization toolkit, allowing for better liquidity management.
2. Intensified monitoring of banks’ net Open Positions (NOPs) to increase oversight to ensure financial institutions comply with regulatory requirements, reducing risks in the banking sector.
3. Review the Structure of the Cash Reserve Ratio (CRR) to assess the broader impact of CRR on liquidity conditions and financial intermediation to ensure an optimal balance between stability and economic growth.
The central bank also reaffirmed its commitment to price stability and fiscal consolidation as outlined in the 2025 budget. It emphasized that maintaining a tight monetary policy stance is necessary to prevent excessive liquidity from undermining efforts to curb inflation.
Overall, these steps help keep the financial system stable and protect the economy from unexpected shocks.
CBN
