Dean of the Business School of the University of Cape Coast Professor John Gatsi has said that the Bank of Ghana (BoG) cannot take shelter in the issues that other central banks are facing for its loss.
He claimed that the problems faced by other countries central banks were different from those that the BoG experienced.
He claimed that the BoG was lending to the central government more than was necessary before the Covid outbreak.
The Bank of Ghana cannot seek refuge from that, a spokesperson said on Tuesday, August 2, during the Ghana Tonight program on TV3. The truth is that the fact that led the Bank of England, for instance, to incur a loss, is not the same.
The Netherlands’ central bank suffered some losses, and the United States central bank had to curtail some of its activities for other reasons. Before Covid was established, the BoG had been lending to the federal government more than the legal limit for nearly three years straight.
The BoG stated that other central banks also suffered losses in a statement in response to inquiries over the GHS60.8 billion loss.
Are there any Central Banks that made losses in 2022 that were equal to those Ghana suffered in 2022: In 2022, several central banks experience losses, which in certain circumstances caused them to experience negative equity. Here are a couple of them, along with some data:
The equity of the Reserve Bank of Australia (RBA) was more than wiped out by the 37 billion Australian dollar book loss reported for 2022. According to the Financial Times on July 25, 2023, the UK Government will have to pay £150 billion to offset the losses incurred by the Bank of England.
Early in January, the Swiss National Bank (SNB) reported a record-breaking preliminary loss of 132
billion Swiss francs in 2022. The Dutch central bank informed the government in a letter in September 2022 that it anticipates net interest losses for the years 2023 through 2026 that might total EUR 9 billion. Since the fall of 2022, the US Federal Reserve has been unable to send weekly transfers of $1 billion to the US Treasury. Instead, the Fed’s balance sheet has since been expanding with a debt obligation to the US Treasury (a liability that the Fed classifies as a delayed asset). The Fed will eventually be required to cover these liabilities (when it starts making profits again).
The Monetary Authority of Singapore reported a net loss of $30.8 billion for the fiscal year that ended on March 31, 2023. What caused central banks to report losses in 2022: Price and financial stability are among the policy mandates that central banks must carry out.
“The achievement of this duty entails the central bank taking on financial risks, such as currency risk through the holding of foreign exchange reserves, or credit risk and interest rate risk through loans to commercial banks/government.
“Some of these risks could come true, resulting in losses. Therefore, incurring losses may be entirely consistent with a central bank’s mandate to ensure the efficient operation of the economy.
“By preserving consumer and investor confidence in the financial system and balancing inflation and economic activity, it supports a healthy economy. As a result, whether central bank actions are successful should always be determined by whether they accomplish these goals.
“Central Banks all across the world aggressively raised interest rates throughout 2022 to combat record-high inflation and re-anchor inflation expectations. Concerns have been raised about the ability of these central banks to carry out their mandates of pricing and financial stability because these decisive moves have resulted in losses and, in some cases, negative equities (i.e., assets and liabilities).