The Central bank in Ghana, the Bank of Ghana (BoG) has revealed that the Monetary Policy Committee (MPC) is faced with a number of challenges in line with its work.
The MPC was established by Bank of Ghana Act of 2002, (Act 612). Section 27 (1) of that Act says “There is hereby established a committee of the bank to be known as the Monetary Policy Committee of the Bank.”
The committee “shall be responsible for initiating proposals for the formulation of the monetary policies of the bank and also providing the statistical data and advice necessary for the formulation of monetary policies.”
Mr Francis Loloh, an official at the BoG, told members of the Journalists for Business Advocacy (JBA) at a workshop in Accra on Tuesday November 7, among other things, that: “External vulnerability, spill over, fiscal dominance, underdeveloped financial markets and unavailability of timely real macroeconomic data.”
Mr Loloh however, stated that there are a number of reforms underway the MPC to ensure an effective exercise.
Meanwhile, Dr Ernest Addison, Governor of the Bank of Ghana, has said, price stability in Ghana’s economy is a key focus of the central bank.
According to him, price stability offers a strong foundation to facilitate growth and development, hence the need to focus on that aspect of the economy.
“In the new legal dispensation, the primary objective of the bank is to maintain price stability independent of instructions from government or any other authority. This has refocused the central bank on the major task of inflation control and indirectly away from developmental activities which characterised the bank’s operations in the past.
To accomplish this, Dr Addison said: “Act 612 mandated the formation of the Monetary Policy Committee responsible for formulating monetary policy which has brought transparency to the central bank’s operations and its communications with the public.”
“The new statutory mandate of the bank is firmly rooted in a resurgence of public interest in economic policies and awareness of how much economic stability contributes to raising the standards of living of its people,” he noted.
Speaking about the importance of price stability to economic development, the central bank governor said “price stability offers the strong foundation to facilitate growth and development; price stability, and in this case achieving and maintaining a low and stable inflation regime, reduces uncertainty and helps economic agents to extract information from relative prices, thus, leading to a more efficient resource allocation and higher growth.”
“By controlling inflation through effective monetary policy formulation, the Bank of Ghana makes the best contribution” towards sustaining “long-term growth and economic development in the country,” Dr Addison said.
Source: Ghana/ClassFMonline.com