Monetary policy rate hike: 'BoG behaving like a God' - Minority
Bank of Ghana Governor, Ernest Addison
Minority in Parliament has tongue-lashed the Bank of Ghana for behaving as if it is more powerful than parliament.
Read full articleIn a press release sighted by GhanaWeb, it said Act 612 or Act 918 of the constitution does not grant the central bank an overdraft when there is lack of access to the international capital markets coupled with domestic financing.
It stressed that parliament has the powers to oversee the works of the central bank and its exceptional financing of government before BoG executes it.
"Notwithstanding Section 4 of the Bank of Ghana Act, 2002 (Act 612), BoG is aware that injection of base money in large amounts will have negative consequences for inflation and hence such a decision should not be taken lightly. Unfortunately, BoG is behaving like a God unto itself and ignoring the negative impact of fiscal dominance on its monetary policy," part of the release stated.
The Minority's comment comes after the Montary Policy Committee of the Bank of Ghana increased the policy rate from 19% to 22% on Wednesday, August 17, 2022.
This was after an emergency meeting was held to address the hike in inflation rates which currently stands at an all-time high of 31.7%.
Food inflation rose to 32.3 percent in July 2022 from 30.7 percent in June 2022. Similarly, non-food inflation increased to 31.3 percent from 29.1 percent in June 2022, contributing 55 percent to the rise in headline inflation in July 2022."
According to the central bank, these happenings including the weakening of the Ghana cedi have pushed the economy into heightening uncertainties leading to the increase in the policy rate.
Read Minority's press release below;
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