We have strong buffers - BoG
The Governor of the Bank of Ghana, Dr Ernest Addison, has insisted that the central bank does not need a positive equity to be able to effectively play its role as the lender of last resort.
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The decision of the central bank to take a 50 per cent hair cut during the Domestic Debt Exchange Programme (DDEP) has resulted in huge losses which has affected the capital of the bank.
This has prompted the need forthe bank to be recapitalised but considering the tight fiscal space that the government is operating in, talks and plans of recapitalising the BoG have been shelved until the country’s economic environment improves.
At a recent Graphic Business Twitter (now X) dialogue series, Banking expert, Dr Richmond Atuahene advised that the recapitalisation of the central bank should be prioritised as soon as the fiscal situation improves.
He said although the impairment to the BoG’s balance sheet might not have any immediate impact on its operations, there could be a potential impact in the next year or two, reason why the government should act fast and recapitalise it.