Ernest Addison
Ernest Addison

Ghana’s central bank has provided budgeting support to the government to plug part of the resource gaps created by the COVID-19 outbreak, the governor Ernest Addison disclosed here on Friday.

Addison said the COVID-19 pandemic had put severe strains on the budget, as seen in petroleum revenue shortfalls created by plunging crude oil prices, shortfalls in import duties, other tax revenues, and non-tax revenues.

“Today, under the asset purchase program, the Bank has purchased a government of Ghana COVID-19 relief bond with a face value of 5.5 billion Ghana cedis (about 951.3 million U.S. dollars) at the monetary policy rate with a 10-year tenor and a moratorium of two years,” Addison told the media.

Besides, Addison said the preliminary assessments showed that the financing gap that estimated at the time of applying for the IMF rapid credit facility of a billion dollars in March had widened significantly, resulting in a large residual financing gap.

The governor said the bank was, therefore, triggering the emergency financing provisions, permitting the increase in the limit of its purchases of government securities in the event of any emergency to help finance the residual financing gap.

“Current market conditions in the wake of the pandemic, will not allow the financing of the gap from the domestic debt capital markets without significantly increasing interest rates,” he told the media at the 94th MPC press briefing.

Given the balance of the risks to the prospects of economic growth, and the upside risks to inflation, the central bank maintained its benchmark policy rate at 14.5 percent. Enditem

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