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BoG’s $120 million cash injection not effective – Ecomomist Featured

Jan 23, 2017

A Senior Lecturer at the KNUST Economics Department, Dr. Grace Ofori Abebrese has given little weight to the Bank of Ghana’s (BoG) decision to inject $120 million into the economy to stabilize the cedi 

According to her, the impact the BoG seeks may not be realized because the economy currently lacks balance since the balance of payments (BOP), interest rates and inflation are all high.

“BOP challenges of the country are going up, as well as inflation so we do not have reserves to salvage the situation”, Dr. Aberese averred.

The economist explained that when, especially, inflation is high citizens like to hedge and so it will be prudent for the BoG to deal with the root cause of the current situation in order for business and citizens to gain confidence in the economy. 

She however added that Ghana has huge deficits so it becomes difficult for the BoG to do anything currently.

In 2015, the BoG injected$20 million into critical areas of the economy but this did not yield dividends.

 

By Kwaku Boakye Karikari

 

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