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IMF tells Bank of Ghana to beef up foreign reserve buffer

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The International Monetary Fund (IMF) wants the Bank of Ghana to beef up its international reserves.

An IMF team led by Christina Daseking visited Ghana during the week of August 29, 2011 and gave the advice when it held talks with officials of the Bank of Ghana (BoG) to discuss the challenges of maintaining low inflation, in the context of sizeable foreign currency inflows.

“The mission encouraged the BoG to further build up its foreign reserve buffer, while carefully managing the impact on domestic liquidity and allowing some adjustments in the exchange rate in response to market forces,” said the IMF in a statement September 2, 2011 after the team completed its work.

In a recent news conference, the BoG told reporters in Accra that its gross international reserves (GIR) was $4.5 billion as at August 19, 2011 which is equivalent to 3.5 months cover of imports of goods and services.

“This may be compared to the December 2010 level of $4.7 billion, equivalent to 3.7 months of import cover,” said Mr. Kwesi Amissah-Arthur at the conference.

Going forward, the IMF advised the central bank to close coordination between fiscal and monetary policy which will remain important to avoid a “re-emergence of high inflation and an associated erosion of real incomes, which particularly harms the poor”.

By Ekow Quandzie

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One comment

  1. Ghana continue to scrap by whiles this country is rich resources based economy like Australia yet Ghana central bank have no Gold Backing, it a shame. Shame to so call leaders who seem have no forsight and lack of vision. If countries central Bank is back by Gold and to be more honest some of these countries don’t even have gold on their soil.