Bank of Ghana swears in Governor Asiama as he outlines reforms to inflation targeting, reserve requirements and the foreign exchange market

The Bank of Ghana published the swearing-in address of its new Governor, Johnson Pandit Asiama, setting out a six-part agenda that signals intended changes to the monetary policy framework, foreign exchange market operations, financial sector regulation and the central bank’s own financial position. On monetary policy, the Governor indicated an intention to reform the inflation targeting framework to increase transparency and improve implementation, discontinue differentiated cash reserve requirements and rely instead on open market operations to manage liquidity, and strengthen communications and regular dialogue with banks. For the foreign exchange market, the address pointed to planned strategic interventions including a new foreign exchange law to replace the Foreign Exchange Act 2006, targeted market operations to reduce “leakages”, deeper participation in the Pan African Payment and Settlement System, reforms to remittances, and changes to pricing and distribution arrangements in the FX market, alongside leveraging gold reserves and reforming the Domestic Gold Purchase Programme. The regulatory agenda highlighted tackling non-performing loans, strengthening cybersecurity and capital adequacy requirements, and updating the Banks and Specialized Deposit-Taking Institutions Act, 2016 to enhance the resolution framework; priorities also included a digital strategy for the central bank, work toward a regulatory framework for digital assets, strengthening provisions in the Bank of Ghana Act, 2002 to reinforce operational independence, and measures to return the Bank’s negative equity position to positive equity in the medium term through cost reductions and reviewing non-core operations.