The Bank of Ghana (BoG) says its decision to take a 50% haircut on government’s debt has saved the economy from collapse and sent a positive signal to external partners.
“With BoG being the absorber, the external partners are also watching. Remember they also need to go through some debt treatment but before that they needed to see what will happen to the Bank of Ghana and now that they’ve seen that, it will send a signal to them.
“With this, I’m sure it will make the process go faster because the biggest policy institution has taken a haircut,” Dr. Philip Abradu-Otoo, director of research at BoG said.
Bank of Ghana (BoG) incurred a loss of GHC55.12 billion in 2022, largely as a result of the government’s Domestic Exchange Programme (DDEP) after its non-marketable holdings of Government of Ghana instruments including long-term stocks, a COVID-19 bond and overdraft were subjected to a 50 per cent haircut.
Also, the Bank’s other claims (holdings of marketable instruments) were exchanged under similar terms as other financial institutions under the DDEP, leading to an impairment of GHC48.40 billion in 2022.
In addition, the Bank incurred revaluation losses on its foreign assets and liabilities due to exchange rate depreciation, leading to a total loss of GHC55.12 billion equity in 2022.
However, the central bank said it would implement measures, including government’s support for recapitalisation to ensure that equity was restored to positive path by the end of 2027.
Dr Abradu-Otoo said the BoG remained committed to policy solvency, diligently managing inflation and ensuring financial stability despite facing challenges emanating from the Domestic Debt Exchange Programme (DDEP).
Asaase Radio 99.5 broadcasts on radio via 99.5 in Accra, 98.5 in Kumasi, 99.7 in Tamale, 100.3 in Cape Coast and on our affiliates Bawku FM 101.5 in Bawku, Beats FM 99.9 in Bimbilla, Somua FM 89.9 in Gushegu, Stone City 90.7 in Ho, Mining City 89.5 in Tarkwa and Wale FM 106.9 in Walewale
Tune in to broadcasts online: www.asaaseradio.com, Sound Garden and TuneIn
Follow us on Twitter: @asaaseradio995
Live streaming on facebook.com/asaase99.5. Also on YouTube: AsaaseXtra.
Join the conversation. Call: 020 000 9951 or 059 415 7777. Or WhatsApp: 020 000 0995.
#Asaase321
#AmplifyingTheVoiceofOurLand
#WeAreHere
#WeLoveOurLand
#SafeMotorway4All
