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Financial Regulations Parliament passes Bank of Ghana amendment bill

The bill among other things seeks to guarantee the independence of the central bank.

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Parliament on Tuesday passed the Bank of Ghana Amendment Bill in a move to enhance the powers of the central bank.

The bill among other things seeks to guarantee the independent of the central bank.

This means the Bank of Ghana will not be subjected to controls in the performance of its functions by the government or any other person.

In addition, the bill empowers the central bank to come to the aid of struggling microfinance institutions and other financial institutions.

A Deputy Finance Minister who serves on the BoG board as government representative will no longer be there as a board member.

However, Parliament refused to agree to the zero financing of government by the Bank of Ghana as required per Ghana's $918 million aid deal with the International Monetary Fund (IMF).

The Finance Committee instead reduced the rate at which government could borrow from the central bank from 10 percent to 5 percent.

The new bill could make it harder for Ghana to secure the third tranche of the aid package because IMF was insisting on Zero financing.

The International Monetary Fund said in a document issued in December 2015 that Ghana should: "Submit to Parliament a revised Law that strengthens the functional autonomy of BoG (and) sets a zero limit on monetary financing to the government and public institutions."

The MP for New Juaben South, Dr Mark Assibey-Yeboah, prior to the passage of the bill said the zero financing was unfair, expressing strong opposition to the idea.

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