The Bank of Ghana (BoG) has expressed worry about the solvency of some Ghanaian banks.

It comes as government prepares to restructure its debt to pave way for an International Monetary Fund (IMF) bailout. This will include haircuts to bondholders.

Ghanaian banks are significantly exposed to these bonds and have historically preferred to buy government bonds instead of investing in commerce.

Addressing a media briefing on Monday, the Governor of the Central Bank, Dr. Ernest Addison stated that they are keeping a close eye on the banks and are ready to intervene to avoid any adverse situation.

According to him, the Central Bank will put in measures to ensure that banks remain solvent. This, he said is the most important task of the Central Bank.

Dr Addison added that BoG will also provide liquidity when the need arises.

“The good thing is that we think that there are adequate buffers. Nevertheless, the Central Bank will put in measures that will ensure that the banks remain solvent,” he assured.

On the subject of Ghana’s galloping inflation, the Governor predicted that the situation will get worse before it gets better.

“The inflation forecast shows that inflation will likely peak in the first quarter of 2023 and settle around 25% by the end of 2023. This forecast is conditioned on the continued maintenance of the tight monetary policy stance and the deployment of tools to contain excess liquidity in the economy,” he said.

According to him, some risks associated with inflation such as additional pressures from the proposed VAT increase in the exchange rate have to be monitored.

Dr Addison added that “to continue to anchor inflation expectations, the committee, therefore, decided to increase the policy rate by 250 basis points to 27%.”