The Bank of Ghana has categorically dismissed allegations that it deliberately maintains high Monetary Policy rates to generate profits, emphasizing its commitment to implementing sound monetary policies aimed at achieving a stable level of inflation.
In an interview, Bernard Otabil, Director of Communications at the BoG, clarified that the central bank’s primary focus is on achieving stability, even if it means incurring losses.
“Claims suggesting that the BoG maintains high interest rates for profit are misinformed and demonstrate a lack of understanding of central banking,” Mr. Otabil stated.
“High interest rates are actually detrimental to the operations of central banks, increasing the cost of open market operations and leading to significant losses. However, this is a necessary measure to achieve stable prices, which is the ultimate goal of central banks.”
Mr. Otabil emphasized that central banks are not commercial banks and do not seek profits, nor do they face the same financial constraints as private institutions.
“Central banks provide a public good, which is low and stable inflation, and this comes at a cost. While a central bank may incur losses, this does not imply a loss of policy effectiveness. Our mandate is to provide the public good of low and stable inflation, and we cannot compromise on this objective for the sake of profits.”
