Home Headlines BoG Reports GH₵10.5 Billion Loss in 2023 Due to Inflation-Fighting Measures

BoG Reports GH₵10.5 Billion Loss in 2023 Due to Inflation-Fighting Measures

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Inflation
Inflation

The Bank of Ghana (BoG) has disclosed a GH₵10.5 billion loss for the fiscal year ending 2023, primarily stemming from a substantial surge in total interest expenses on open market operations, which increased by GH₵6.7 billion during the period.

These heightened expenses were necessary to manage excess liquidity in the economy and support the disinflation process as part of a broader macroeconomic adjustment program.

Financial Overview:

  • Liabilities Exceed Assets: BoG and its subsidiaries reported total liabilities surpassing total assets by GH₵65.36 billion.
  • Operating Income: Total operating income for the Bank and the Group surged by 47.3% to GH₵8.8 billion in 2023, driven by interest earned on investments in securities and bonds held abroad, regulatory fines, and fees.
  • Operating Expenses: Operating expenses decreased to GH₵19.2 billion in 2023 from GH₵66.9 billion in 2022, attributed to lower impairment charges on loans and advances.
  • Impairment Charges: Impairment charges on loans and advances and Government of Ghana securities amounted to GH₵54.5 billion in 2022 due to the Domestic Debt Exchange Programme.

Monetary Policy Measures:

  • Excess Liquidity Management: Increased costs associated with open market operations aimed to mop up excess liquidity and support disinflation, leading to a decrease in inflation to 23.2% by the end of 2023 from 54.1% in 2022.

Future Strategies:

  • Recapitalization: BoG plans to secure early recapitalization through a Memorandum of Understanding with the Ministry of Finance, optimizing its investment portfolio and operating cost mix for enhanced efficiency and profitability.
  • IMF Programme Review: Extensive discussions during the second review of the ongoing IMF program emphasized the impact of the Domestic Debt Exchange Programme on BoG’s balance sheet, with consensus reached on early recapitalization.

Despite the significant loss recorded, BoG remains committed to its policy mandates, aiming to operate efficiently and effectively while navigating the economic landscape with prudence and resilience.

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