• 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

3 years ago
in Business, Economy, Features, highlights, Home, home-news, latest News, Markets
1 min read
0 0
0
63
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

Africa’s Fastest-Growing Economy Sets new Rules for Foreign Stake in Local Banks

Nigeria’s Oil Production Could Reach 2 Million bpd by Next Year

BoG Halts GCB Bank Dividend Payment Over Regulatory Breach

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

How an Idle Land Tax Could Build 10,000 Homes in 5 Years

Thibaut Courtois Accuses La Liga of ‘Manipulation’ Amid Protests Over Miami Fixture

Historic Bid: U.S. Joins Forces with Mexico, Costa Rica, and Jamaica for 2031 Women’s World Cup

Bank of Ghana Sells GHS 7.0bn in 56-Day Bills at 21.46% Interest Rate

Deputy Finance Minister Hints 2026 Budget to Prioritise Fiscal Discipline and Job Creation 

FirstBank and Coronation Insurance Strengthen Partnership to Deliver Greater Value to Customers

Trending

Business

Africa’s Fastest-Growing Economy Sets new Rules for Foreign Stake in Local Banks

October 21, 2025

Africa’s Fastest-Growing Economy Sets new Rules for Foreign Stake in Local Banks Ethiopia has officially moved closer...

Nigeria’s Oil Production Could Reach 2 Million bpd by Next Year

October 21, 2025

BoG Halts GCB Bank Dividend Payment Over Regulatory Breach

October 21, 2025

How an Idle Land Tax Could Build 10,000 Homes in 5 Years

October 21, 2025

Thibaut Courtois Accuses La Liga of ‘Manipulation’ Amid Protests Over Miami Fixture

October 21, 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.