According to him, the role of the central bank in ensuring the economy did not buckle under the weight of the crisis is commendable.
Ghanaians should applaud us for saving the economy — BoG boss Addison tells Ghanaians
The Governor of the Bank of Ghana, Dr. Ernest Addison has called on Ghanaians to praise them for working tirelessly to save the ailing economy from collapse despite the challenges it faced over the period.
He said central banks all over the world have had to re-evaluate their mandate since the global financial crisis of 2007/2008 and have supported fiscal policy to play a countercyclical role in stabilising economies, explaining that central banking has never been the same.
Speaking at the Chartered Institute of Bankers' Governor's Day, Dr. Addison indicated that before the financial crisis, the quintessential task of central banks was straightforward: keeping inflation within a tight range through the control of short-term interest rates.
“In a world of polycrisis, central banks have found themselves broadening monetary policy formulation beyond interest rates to include the deployment of balance sheets in a variety of unconventional monetary policies."
"Thus, the crisis exposed a chasm between theory and practice," he underscored.
He explained that "all the Bank of Ghana did as various shocks hit the economy was consistent with prudent crisis management."
He said that in the 2020 pandemic, the central bank supported the financing of the budget to protect lives and livelihoods.
"In the 2022 economic and liquidity crisis, the central bank would not have acted differently but played its role as an automatic stabiliser to avoid pushing the economy to a tipping point that possibly could have spilled into social upheavals, as was the case in Sri Lanka," Addison recalled.
"It is very clear that only a central bank that has been prudently run, built buffers, and is well-positioned can step in to support an economy from collapse.
"It is, therefore, most appropriate, I believe, to state that Ghanaians should rather applaud and commend the resilience of the Bank of Ghana," he noted.
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