BoG to Closely Manage Liquidity Risks from Government’s Big Push Agenda, Says Governor Asiama
Governor of the Bank of Ghana (BoG), Dr Johnson Asiama, has assured that the central bank will actively manage potential liquidity and inflationary pressures arising from the government’s planned scale-up in infrastructure spending under the Big Push agenda.
According to the Governor, while increased infrastructure expenditure could inject additional liquidity and stimulate demand in the economy, its ultimate inflationary impact will largely depend on how the spending is financed, sequenced, and absorbed.
“The Bank recognises that a scale-up in infrastructure spending can increase liquidity and demand pressures in the economy. However, the inflationary impact will depend critically on how this spending is financed, paced, and absorbed by the economy,” Dr Asiama said.
He noted that although recent disinflation trends have created some space for calibrated monetary easing, the central bank’s policy stance remains sufficiently restrictive to safeguard price stability. Dr Asiama stressed that the Monetary Policy Committee (MPC) will continue to closely monitor macroeconomic developments and take appropriate measures to ensure inflation remains within the target band.
“To manage potential inflation risks, the Bank will continue to deploy a prudent and forward-looking monetary policy stance,” he stated.
The Governor further emphasised the importance of strong coordination between monetary and fiscal authorities, particularly in relation to the timing and financing of large-scale infrastructure projects, to prevent undue pressure on macroeconomic stability.
In addition, Dr Asiama said the Bank of Ghana will actively deploy open market operations and other policy instruments to sterilise excess liquidity where necessary, reinforcing its commitment to maintaining macroeconomic and price stability as government infrastructure spending intensifies.
