IMF Resident Representative in Ghana, Dr. Leandro Medina, has stated that the involvement of the Bank of Ghana in the government's Domestic Debt Exchange Programme (DDEP) has played a role in reducing its net equity to a negative figure.

He explained that the Central Bank's participation in this debt exchange is part of an initiative to distribute some of the responsibilities that the DDEP places on government debt holders, including banks, financial institutions, pension funds, and individuals.

During an interview with the B&FT newspaper, Dr. Medina pointed out that an analysis conducted by the Fund revealed that “this situation does not hinder the BoG from effectively executing its policy mandates, including the vital task of guiding inflation back to its 8-percent target in a gradual manner”.

“Fundamentally, the BoG’s net equity is expected to improve over time, ultimately resulting in a return to positive territory,” the IMF resident representative for Ghana added.

In the meantime, the Central Bank has periodically clarified that it was compelled to absorb the larger portion of the reductions linked to the government's debt exchange initiative introduced in December 2022.

The Bank specified that it bore nearly 50 percent of the adjustments, resulting in a substantial segment of the GH¢60 billion impairment loss documented in the 2022 fiscal year.

Nonetheless, the Central Bank has assured that its financial standing will remain unaffected during the subsequent phase of the DDEP, which aims at addressing US dollar-denominated bonds, pension funds, and cocoa bills.