Report Accurately to Calm Financial Markets – Senior Deputy Governor Tells Reporters
Senior Deputy Governor, Dr. Maxwell Opoku-Afari
The Bank of Ghana’s Senior Deputy Governor, Dr. Maxwell Opoku-Afari advised journalists to report financial and economic news accurately.
He said this would calm financial market participants and avoid disorderly reactions during these times of heightened uncertainty.
The ongoing conflict between Russia and Ukraine has led to a downward revision of global growth forecasts by the International Monetary Fund, while the crisis has also increased inflationary pressures due to rising food prices and Energy. This necessitated rolling back COVID-19 era policies and tightening monetary policy in various countries.
Opening a workshop for Journalists for Business Advocacy (JBA), Dr Opoku-Afari said accurate reporting on these developments was needed to restore confidence in the economy.
“Efforts to build confidence will have to come from all facets of economic life. Institutions must play their part, private agents must take advantage of the conditions around them, the government must play its part to ensure growth in a stable economic environment and the Central Bank will have to guarantee low and stable inflation using the tools to its disposition. The press must take advantage of everything to influence the direction of economic thought and to influence society.
“Let us remember the IPI cardinal principle of journalism. The press must inform, persuade and influence society. In doing so, the press will have to use all the available data at its disposal, to conduct an analytical discourse and to imbue itself with confidence. Journalists need to go beyond the data provided to them and interrogate the data further to better understand, fact-generating data. All of these elements work together to engender economic confidence and that is where we need to be headed,” he stressed.
He explained that developments in the global economy, including the Russian-Ukrainian war, prompted strong and coordinated monetary and fiscal policy measures, including a 250 basis point hike in the policy rate to 17.5%. , the cancellation of macroprudential regulatory relief related to Covid-19. and the 20% cut in government spending as well as an additional 10% cut in discretionary spending to support the fiscal consolidation process.
“The government further announced a $2.0 billion syndicated deal in line with approved external funding for 2022 and for liability management. These measures should help restore macroeconomic stability and boost investor confidence in the national economy,” he added.
Further, the First Deputy Governor stated that “The Bank of Ghana has extended the Forex Futures Auction to include Bulk Oil Distribution Companies (BDCs) to mitigate increased volatility in the foreign exchange market. (FX) and in the first auction on March 30, 2022, the Central Bank sold approximately $104.86 million above the BDC’s $100 million auction target.
Currency futures auctions, he said, were part of measures taken by the bank to manage currency liquidity in the local oil sector, minimize uncertainty of future currency availability and facilitate price discovery. , especially for the general pricing window in the downstream sector. , adding that “this strategy has contributed to the relative stability seen in the forex market and, with some normalization underway, the trend is expected to continue until the local currency returns to its fundamental equilibrium level.”
He mentioned that the economy has rebounded strongly from the pandemic (COVID-19) as evidenced by national accounts data recently released by the Ghana Statistical Service.
He also pointed out that the remarkable resilience shown by the banking sector over the two-year period could be attributed to the comprehensive financial sector reforms that took place before the COVID-19 pandemic hit in 2020, adding While the sector continues to remain liquid, profitable and well capitalized as a measure of sector solvency, the capital adequacy ratio remained well above the revised prudential limit of 13%.