• Login
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
  • Home
  • News
    • General
    • Political
  • Economy
  • Business
    • Agribusiness
    • Aviation
    • Banking & Finance
    • Energy
    • Insurance
    • Manufacturing
    • Markets
    • Maritime
    • Real Estate
    • Tourism
    • Transport
  • Technology
    • Telecom
    • Cyber-security
    • Cryptocurrency
    • Tech-guide
    • Social Media
  • Features
    • Interviews
    • Opinions
  • Reports
    • Banking/Finance
    • Insurance
    • Budgets
    • GDP
    • Inflation
    • Central Bank
    • Sec/Gse
  • Lifestyle
    • Sports
    • Entertainment
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video
No Result
View All Result
No Result
View All Result
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
No Result
View All Result
Home Business

IEA proposes Currency Board System to curb Central Bank lending

2 years ago
in Business, Economy, Features, highlights, Home, home-news, latest News, Markets
1 min read
0 0
0
59
VIEWS
Share on FacebookShare on TwitterShare on Linkedin

IEA proposes Currency Board System to curb Central Bank lending

The Institute of Economic Affairs (IEA), a renowned Ghanaian think tank, is advocating for the implementation of a Currency Board (CB) system in Ghana to limit Central Bank lending to the government. The IEA believes that this will help to stabilize the cedi and prevent economic instability in times of shocks.

The CB system is a rigid monetary management system that operates under strict rules, with little room for discretion. This system covers its currency fully with foreign exchange and does not lend to the government, which limits inflation and prevents currency depreciation and balance of payments crises. The IEA highlighted the success of the CB system in Francophone countries, which guarantees them low inflation and a stable currency. However, Ghana has chosen an independent Central Bank to conduct discretionary monetary policy, which the IEA blames for the country’s economic instability.

Despite having rules such as the Public Financial Management Act, the Bank of Ghana Act, the Fiscal Responsibility Act, and the relevant provisions in the 1992 Constitution, their enforcement and effectiveness are in question. Therefore, the IEA believes that rules-driven macroeconomic stability is necessary to prevent policy discretion abuse and enjoy economic stability.

The IEA’s call for a CB system in Ghana is not without merit. The country has had a long-standing issue with currency depreciation and inflation, which has led to economic instability. The Bank of Ghana’s lending to the government and limited foreign exchange cover of the cedi have exacerbated the situation. Moreover, the COVID-19 pandemic has exposed the country’s vulnerability to external shocks, and there is a need for a robust and stable monetary policy framework to navigate the uncertain times ahead.

The IEA’s proposal for a CB system has its strengths and weaknesses. On the one hand, the system is proven to be effective in limiting inflation and maintaining a stable currency. On the other hand, it is a rigid system that offers little room for discretion, which could be a disadvantage in times of economic crisis. Additionally, the CB system requires adequate foreign exchange reserves, which could be a challenge for Ghana, given its current account deficit.

Therefore, it is essential to carefully weigh the pros and cons of implementing a CB system in Ghana. The country needs a robust monetary policy framework that ensures macroeconomic stability, but it also needs flexibility to navigate uncertain times. It is crucial to strike a balance between these two needs and find a solution that works best for Ghana.

RelatedPosts

Chamber of Mines Pushes for Longer Stability Agreements to Safeguard Ghana’s Mining Competitiveness

Why Shorter Mining Leases Could Cost Ghana Big Projects and Jobs

Gold Price Hits Record High as Investors Seek Safety

The IEA’s call for a Currency Board system in Ghana to limit Central Bank lending to the government is an important one. The country needs a robust and stable monetary policy framework that ensures macroeconomic stability and prevents economic instability. However, it is important to consider the pros and cons of the proposed system carefully and find a solution that works best for Ghana.

Tags: BOGCurrency BoardIEAIEA proposes Currency Board System to curb Central Bank lending
No Result
View All Result

Highlights

Nigeria: Forex Traders Say Chinese Traders Now Collecting Naira Instead of Dollars

Chinese Firm Faces $420 Million Zambia Mine Spill Damages Claims

60% of Africans Don’t Believe Democracy is Working in Their Interests – How Parliaments Can Fix The Problem

Banking Sector the Most Robust and Advanced Sector in Fight Against Money Laundering – Report

West Africa: Ghana Flagged as Target for Illicit Financial Flows in Latest National Risk Assessment

Central Bank Raises GH¢2.34bn in Short-Term Bill Sale at Nearly 25% Yield

Trending

Business

Chamber of Mines Pushes for Longer Stability Agreements to Safeguard Ghana’s Mining Competitiveness

September 3, 2025

Chamber of Mines Pushes for Longer Stability Agreements to Safeguard Ghana’s Mining Competitiveness The Ghana Chamber of...

Why Shorter Mining Leases Could Cost Ghana Big Projects and Jobs

September 2, 2025

Gold Price Hits Record High as Investors Seek Safety

September 2, 2025

Nigeria: Forex Traders Say Chinese Traders Now Collecting Naira Instead of Dollars

September 2, 2025

Chinese Firm Faces $420 Million Zambia Mine Spill Damages Claims

September 2, 2025

Who we are?

NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World

NorvanReports is a unique data, business, and financial portal aimed at providing accurate, impartial reporting of business news on Ghana, Africa, and around the world from a truly independent reporting and analysis point of view.

© 2020 Norvanreports – credible news platform.
L: Hse #4 3rd Okle Link, Baatsonaa – Accra-Ghana T:+233-(0)26 451 1013 E: news@norvanreports.com info@norvanreports.com
All rights reserved we display professionalism at all stages of publications

No Result
View All Result
  • Home
  • Business
    • Agribusiness
    • Aviation
    • Energy
    • Insurance
    • Manufacturing
    • Real Estate
    • Maritime
    • Tourism
    • Transport
    • Banking & Finance
    • Trade
    • Markets
  • Economy
  • Reports
  • Technology
    • Cryptocurrency
    • Cyber-security
    • Social Media
    • Tech-guide
    • Telecom
  • Features
    • Interviews
    • Opinions
  • Lifestyle
    • Entertainment
    • Sports
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
NORVANREPORTS.COM | Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.