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BoG Refutes Claims On Money Printing   
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The Bank of Ghana has refuted claims that it has been asked by the government to print money. The bank was reacting to reports in the Statesman newspaper that the Finance Minister had written to the governor of the Central bank to print extra money in excess of GH˘2 billion and that the outgoing Governor, Dr Paul Acquah, was resisting every pressure to print such high amounts of cedis.

According to the central bank, the government sought the general assistance of the Bank of Ghana, as normal practice, to raise GH˘1.5 billion over a period to augment its fiscal resource base to enable it meet outstanding arrears that accumulated in 2008 and were not known at the time of preparing the budget.

A statement signed by the Secretary to the bank, Mr Alex Bernasko, said the Bank of Ghana was the fiscal agent and banker of the government and could offer such assistance to the government.“The framework for its dealings with government is provided in the Bank of Ghana Act 2002, Act 612. Therefore, the Bank of Ghana can be requested to assist government to streamline its finances and budgetary activities due to the occasional budgetary activities lack of synchronization between government revenue flows and expenditures as happens in most countries,” the statement stressed.

The BoG explained that in the particular case that was the subject matter in the Statesman’s publication, the amount was to be raised over a period of time so as not to compromise macroeconomic stability. This means it would not carry any inflationary pressures as the publication sought to make the public believe.

According to the central bank, several alternatives existed by which the BoG assisted the government in such cases.“For example, the bank may decided to float government bills or issue bonds to the domestic market on behalf of government or may grant temporary advances to government subject to the statutory limits provide in Section 30 of Act 612”, it stated. “In each case the Bank of Ghana ensures that the appropriate financing method is used, that will not impact adversely on macroeconomic stability”, it stressed.

In any case, the BoG clarified, it was not even feasible or prudent to print currency of such magnitude in such a short period of time.

Source: D-Graphic

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