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Business News of Thursday, 18 August 2022

Source: www.ghanaweb.com

BoG to boost foreign exchange auctions through mining, foreign oil firms

Governor of the Bank of Ghana, Dr. Ernest Addison Governor of the Bank of Ghana, Dr. Ernest Addison

The Bank of Ghana has disclosed that it is collaborating with mining firms, foreign oil firms, and their bankers to purchase all foreign exchange arising from the voluntary repatriation of export proceeds from mining and oil companies.

According to the central bank, this move is aimed at boosting the supply of foreign exchange to the economy and strengthening the bank’s foreign exchange auctions.

In its recent monetary policy statement issued after the committee held an emergency meeting held on August 17, the central bank announced additional measures to review economic development in the country.

As part of the measures, the Bank of Ghana reviewed the primary reserve requirement of banks from 12 percent to 15 percent to be implemented in a phased manner with 13 percent from September 1, 2022; 14 percent by October 1 2022 and 15 percent by November 1, 2022.

Meanwhile, the Bank of Ghana has hiked the monetary policy rate by 300 basis points from 19 percent to 22 percent in a move to deal with current inflationary pressures.

It explained that "Under the circumstances, and considering the risks to the inflation outlook, the Committee decided on a 300 basis points increase in the Monetary Policy Rate to 22 percent."

"The latest consumer price index release showed that the headline inflation accelerated further for the eleventh consecutive month to 31.7 percent in July 2022, from 29.8 percent in June 2022. This was driven by both food and nonfood price pressures,” the BoG added.

Ghana's food inflation increased to 32.3 percent in July 2022 from 30.7 percent in June 2022.

Similarly, non-food inflation, according to the Ghana Statistical Service also increased to 31.3 percent from 29.1 percent in June 2022, contributing 55 percent to the rise in headline inflation in July 2022.

According to the BoG, these happenings including the weakening of the Ghana cedi have pushed the economy into heightening uncertainties leading to the increase in the policy rate.

Read the BoG's full statement below:



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