Printed cash saga: GH¢22bn, not new currency but govt’s net claims – BoG

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The Bank of Ghana (BoG) has debunked the allegations by the minority in parliament that it has printed new currency for the country without parliamentary approval.

The Central Bank, in a statement explained that the GH¢22.04 billion, the Minority spokesperson on Finance, Cassiel Ato Forson is alleging that it has printed “represents net claims on government, and not new currency printed to support the government’s budget.”

It said the net claims constitute four components; GoG stocks and bonds sold by commercial banks to Bank of Ghana under repurchase agreements, IMF SDR allocation disbursed to Government through Bank of Ghana, draw-down of government’s own deposits held with Bank of Ghana and negative balance on government’s account with Bank of Ghana.

“First, there is an amount of GH¢1.6 billion, which reflects GoG Stocks and bonds sold by commercial banks to Bank of Ghana under repurchase agreements. These bonds, held by a commercial bank since 2021 were purchased by the Bank of Ghana to provide liquidity to the bank, under a repurchase agreement that required the bank to buy back these bonds at a later date.”

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“Having purchased these bonds on the secondary market as a secondary transaction, Bank of Ghana’s holdings of GoG bonds increased by GHC 1.6 billion, not because it had lent money to Government, but because it had purchased a GoG bond originally purchased by the bank for investment purposes,” portions of the statement explained.

Ato Forson claimed the BoG and government perpetuated an illegality which must be dealt with.

“Between January and June 2022, the Minister responsible for Finance and the government went to the Central Bank, and they encouraged the BoG to print money worth GH¢22 billion. They have printed GH¢22 billion fresh money without the knowledge of Parliament and without informing all of us”, he said

But the BoG denied this claim, assuring that it is “committed to complying fully with all relevant legal requirements.”

“Bank of Ghana’s operations are constantly guided by the requirements of the Bank of Ghana Act, 2002 (Act 612) as amended. As indicated in the Minister’s speech, should the need arise for emergency financing by Bank of Ghana in line with the BoG Act, Bank of Ghana, as was done in the case of the Covid-19 Bond of 2020, will follow the processes prescribed by the Act.”

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