BoG denies printing money to support budget

The Bank of Ghana has responded to an allegation by the Minority Ranking Member of the Finance Committee in Parliament, Dr. Cassiel Ato-Forson printed money ro support the budget without approval from parliament.

The central in a statement clarified that the said amount of GH¢22.04 billion Mr. Forson claimed to have been printed “represents net claims on Government, and not new currency printed to support the Government’s budget.”

The statement explained that the net claims constitute four components; GoG stocks and bonds sold by commercial banks to Bank of Ghana under repurchase agreements, IMF SDR allocation disbursed to Government through Bank of Ghana, draw-down of government’s own deposits held with Bank of Ghana and negative balance on government’s account with Bank of Ghana.

“First, there is an amount of GH¢1.6 billion, which reflects GoG Stocks and bonds sold by commercial banks to Bank of Ghana under repurchase agreements. These bonds, held by a commercial bank since 2021 were purchased by the Bank of Ghana to provide liquidity to the bank, under a repurchase agreement that required the bank to buy back these bonds at a later date.”

“Having purchased these bonds on the secondary market as a secondary transaction, Bank of Ghana’s holdings of GoG bonds increased by GHC 1.6 billion, not because it had lent money to Government, but because it had purchased a GoG bond originally purchased by the bank for investment purposes,” portions of the statement added.

It also indicated that the bank is guided by requirements of the Bank of Ghana Act on it’s operations.

“Bank of Ghana’s operations are constantly guided by the requirements of the Bank of Ghana Act, 2002 (Act 612) as amended. As indicated in the Minister’s speech, should the need arise for emergency financing by Bank of Ghana in line with the BoG Act, Bank of Ghana, as was done in the case of the Covid-19 Bond of 2020, will follow the processes prescribed by the Act.”

Read the full statement below


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