Rising BoG losses may test currency stability - Economist warns

The Founder and Managing Partner of Songhai Group, Hene Aku Kwapong, is calling on the government to take a second look at Ghana’s monetary policy framework, warning that the financial position of the Bank of Ghana could have implications for economic stability and credibility.

His comments follow discussions on the Bank of Ghana’s 2025 financial performance after it recorded an operating loss of about GH¢15.6 billion, alongside widening negative equity and rising costs linked to liquidity operations, exchange rate pressures, and debt restructuring.

Despite these challenges, the central bank has maintained that it remains policy solvent, insisting that its core income is still sufficient to support its monetary policy operations.

BoG cuts currency production costs by half despite rising cash demand

Speaking on The Point of View on Channel One TV on Monday, May 4, 2026, Kwapong said policymakers must carefully balance competing priorities in managing the economy.

He explained that central banking decisions are often shaped by what he described as an “impossible triangle” involving independence, exchange rate stability, and capital controls.

“We have to actually do serious policy. There is what I will call the impossible triangle that every central bank has to work through. There is banking independence, FX stability, and also capital controls,” he said.

According to him, managing these competing objectives comes with difficult trade-offs, particularly in a challenging economic environment.

Kwapong further warned that the central bank’s rising negative equity and broader financial pressures could affect its ability to respond effectively to currency challenges.

“We are at a point where, if we get into a case where the central bank is running such a huge negative equity position, its capacity to defend the currency, should it be necessary, and even its credibility, is on the line,” he stated.

He noted that the issue goes beyond the numbers on the balance sheet, stressing that institutional credibility is equally at stake.

“That is for me what we have to step back, take a look at these four buckets and say how do we manage these going forward,” he added.

SO/MA