The Governor of the Bank of Ghana (BoG) Dr. Johnson Asiama has announced six priority areas to help reform Ghana’s financial sector and stabilise the cedi against the dollar.
Speaking at the Jubilee House after a swearing in ceremony of the Governor and his deputy Dr. Zakari Mumuni, Dr. Asiama said it is important to recalibrate the monetary policy strategy and enhance the policy framework to achieve the BoG’s mandate more efficiently.
“Under my leadership, our policies will be clear, predictable, and responsive to emerging threats. We shall adopt a more proactive and precise approach to managing inflation, leveraging on advanced data analytics and artificial intelligence”, he assured.
Dr. Asiama promised to coordinate policy efforts with other government agencies for example to manage food prices.
“We shall be consistent in our policy actions to avoid sending conflicting signals as happened in the recent past, and we shall work to enhance monetary policy implementation”, he said.
Outlining more measures to be taken, he pledged to pursue reforms in the inflation targeting framework to foster more transparency and enhance the effectiveness of monetary policy implementation.
He added that the BoG will discontinue the use of differentiated cash reserve requirements, and instead rely on open market operations (OMOs) to manage liquidity conditions.
“We shall improve our communication regime and ensure regular dialogue with banks on regulatory matters. We are confident that current levels of inflation will gradually trend back to target range and within the forecast horizon”.
Touching on exchange rate stability, Dr. Asiama said the BoG will ensure exchange rate stability and limit excessive volatility in the rates.
“The days of currency speculation and exchange rate instability must come to an end, and we are poised to ensure this happens. In this regard, the Bank of Ghana under my leadership will engineer a well-functioning, and stable foreign exchange market to support economic activity”.
He added that the BoG will implement strategic interventions, including the enactment of a new foreign exchange law to replace the Foreign Exchange Act 2006 (Act 723).
“We implement targeted market operations to eliminate leakages of forex and improve our reserves management and deepen our participation in the Pan African Payment and Settlement System (PAPSS), allowing Ghanaian businesses to trade across Africa using local currencies instead of always relying on the US dollar”.
He assured that the BoG will further implement reforms in the remittance space and collaborate with the Fintech and remittance agencies to harness remittances as a major source of foreign exchange.
According to him, the BoG will introduce structured and transparent systems that ensure fair pricing and fair distribution in the forex market.
“We shall leverage our gold reserves and strategic foreign assets more effectively to support the Ghana cedi and reform the Bank of Ghana’s Domestic Gold Purchase Programme to improve efficiency, enhance reserve accumulation, and increase transparency in gold transactions”, he said.
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