Gov’t is interfering in Bank of Ghana’s work – Kwaku Kwarteng

Policy Advisor and MP for Obuasi, Kwaku Kwarteng, has lashed out at government accusing it of meddling in the business of the Bank of Ghana. According to Kwaku Kwarteng, the government’s involvement in respect of the central bank’s measures against dollarization of the cedi was needless and improper in the face of the law.

His comment follows Cabinet’s meeting with officials of the Central Bank on Monday regarding measures announced by the bank to arrest the dollarization of the economy and the fast decline of the cedi.

Although it endorsed the Central Bank’s measures, Cabinet expressed concern about the lack of clarity in some of the directives announced by the Bank, especially those aspects that affect the operations of foreign currency accounts and their impact on the operations of exporters and businesses in general.

Following cabinet’s request, the central bank agreed to address any ambiguities in the measures announced and provide more clarity. Government also asked all state agencies to support the enforcement of the directives to achieve the desired results.

The BoG last week revised rules governing the operations of Foreign Exchange and Foreign Currency Accounts in the country in a frantic move to arrest the rapid depreciation of the cedi. The revision of the rules saw the abolishing of cheques or cheque books in foreign exchange accounts and foreign currency accounts.

According to the new rules, cash withdrawals over the counter from foreign exchange accounts and foreign currency accounts shall only be permitted for travel purposes outside Ghana and shall not exceed US$10,000.00 or its equivalent in convertible foreign currency, per person, per travel.

No bank is also allowed to grant a foreign currency denominated loan or foreign currency linked facility to a customer who is not a foreign exchange earner. The Cabinet meeting over the matter took note of recent developments in the global economy, especially exchange rate adjustments in emerging and frontier economies.

Cabinet further agreed on the need to support the Bank of Ghana in the implementation of the measures and directed State agencies to fully support these efforts. But Hon. Kwaku Kwarteng says government acted in a way that can be interpreted as interference with the legal mandate of the Bank of Ghana.

“The central bank has the powers to manage monetary policy and it is in exercise of these powers granted it by law that they made those decisions and it is not for government to agree or disagree, and I don’t see the reason for which government seemed to have been intervening in such matters,” he noted.

He opined that the dramatic depreciation in the value of the cedi was “largely to do with the negative balance of trade emanating from the huge disparities between the value of Ghana’s imports and exports;” and expected that government should have rather been looking at providing complementary policies to support the central bank’s course to arrest the depreciation of the cedi.

He believes government would have done the economy some good by rather considering policy initiatives to expand the country’s productive sectors and encourage exports to help shore up the cedi.