Bank of Ghana will not relent in efforts to tame inflation, achieve price stability – Governor

Dr. Ernest Addison

Governor of the Bank of Ghana (BoG) Dr Ernest Addison says the Bank will not relent in its efforts to tame inflation and attain price stability despite global and local pressures.

In a speech read on his behalf at the 39th Annual General Meeting (AGM) of Ghana Association of Banks by the Head of Banking Supervision at the central bank, Osei Gyasi, the Governor said although inflation remains significantly above the medium target band, the bank was committed to the tight monetary policy stance to achieve price stability.

Dr Addison said the banking sector had been resilient but warned that recent developments in the macroeconomy pose some upside risks to the wider financial sector and urged the banks to employ strong risk management systems to ensure the stability of the banking industry.

“Currently, the banking sector continues to exhibit strong performance despite challenges in the macroeconomic environment. The sector remains healthy with some improvement in assets.

However, the recent developments in the micro economy may put some outside risk to the sector in the outlook, hence banks must deploy a strong risk management system to ensure stability,” he said.

On her part, Mrs Mansa Nettey, President of GAB, said while the government was taking the necessary actions to achieve debt sustainability, it should not be done at the expense of gains in the sector.

“Government must ensure that this is not done at the cost of financial sector stability, inadvertently undoing so much of what has been achieved in strengthening the banking sector, as a sound and stable economy needs an equally sound and stable banking system, one that can support the country’s long-term goals.”

Mrs Nettey said further stated that while the industry recognises drastic measures need to be taken by the central bank in effectively combatting inflation, banks must be encouraged with regulatory incentives to soften the impact.

“We recognise that the Bank of Ghana had to front-load the tightening; however, they must be provided with regulatory incentives to help them navigate the current economic challenges and continue to support the economy,” she said.

With the expectation of a tough business environment in the near term, she said it is important that banks review existing operations and investment strategies to ensure sustainable performance as they remain risk-aware and undertake effective credit management processes.

Speaking in an interview with Journalists, the Chief Executive of the Ghana Association of Banks, John Awuah, said the industry was adopting strategies to deal with digital-related fraud.

He said the banks were working to find solutions by arresting and prosecuting such offences as well as retooling to be able to detect and avoid some of these activities.

Meanwhile, the Association has launched the second edition of its magazine known as the Banker’s Voice.

The magazine, with support from the Auditing and Accounting Firm, KPMG, as the knowledge partner, analyses the prospects of the industry and some signals that may keep the financial sector going.

Source: GNA

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