We deserve applause not crucifixion - BoG Governor tells Ghanaians

Bank of Ghana Governor Ernest Addison has said the central bank deserves "applause" for being resilient enough to support the economy during the 2022 crisis.

Speaking at the Chartered Institute of Bankers' Governor's Day, Dr Addison said the role of the central bank in ensuring the economy did not buckle under the weight of the crisis was commendable.

Central banks all over the world, he noted, have had to re-evaluate their mandate since the global financial crisis of 2007/2008 and have supported fiscal policy to play a countercyclical role in stabilising economies.

Consequently, Dr. Addison explained, "Central banking has never been the same".

"Before the financial crisis, the quintessential task of central banks was straightforward: keeping inflation within a tight range through the control of short-term interest rates".

However, he pointed out that "in a world of polycrisis, central banks have found themselves broadening monetary policy formulation beyond interest rates to include the deployment of balance sheets in a variety of unconventional monetary policies".

"Thus, the crisis exposed a chasm between theory and practice", he underscored.

Indeed, he noted, "all that Bank of Ghana did as various shocks hit the economy was consistent with prudent crisis management."

He said in the 2020 pandemic, the central bank supported the financing of the budget to protect lives and livelihoods.

Again, he recalled, "In the 2022 economic and liquidity crisis, the central bank would not have acted differently but played its role as an automatic stabilizer to avoid pushing the economy to a tipping point which possibly could have spilled into social upheavals as was the case in Sri Lanka".

"It is very clear that only a central bank that has been prudently running, built buffers, and well-positioned, can step in to support an economy from collapse".

"It is, therefore, most appropriate, I believe, to state that Ghanaians should rather applaud and commend the resilience of the Bank of Ghana", he said.

In October this year, the minority caucus led a demonstration against the Governor and his two deputies, calling for their exit for mismanaging the central bank.