Bank of Ghana officials have projected the nation’s economy is to hit a single digit inflation rate again by the second half of next year, subject to world market price of oil and stability in the exchange rate.
Mr Mollison Narh, Second Deputy Governor of the nation’s apex bank, on Thursday said there had been positive signs of the open market operations of the Central Bank in the recent weeks with an appreciation of the local currency.
He told a Public Accounts Committee of Parliament sitting in Accra that the country’s depleting foreign reserves was responsible for the weakening of the local currency.
The bank’s officials were before the PAC) to clarify outstanding issues relating to the Auditor General’s report covering foreign exchange receipts.
“We are not able to support the market adequately because of the low reserves levels that we have. Once you reduce your reserves what happens is that you are not able to support the market as you would have and this actually impacts on the performance of the currency from time to time,” Mr Narh said.
He added that low reserves levels were not able to support the local currency, and funds from the reserve did no lie idle but are invested to liquidate investments to meet the demands of the commercial banks.
According to the Deputy Governor, there was no “missing” US$600 million from the foreign reserves of the bank which came up at an earlier meeting of the PAC with officials of the bank.
The issue of the US$600 had come up at an earlier meeting of the PAC with the BOG, but the Committee was then not satisfied with the explanation offered by Mr Yaw Abalo, and therefore insisted that the Governor or any of his deputies appear before the committee to answer questions how those monies spent.
Mr Narh said d it was recently discovered that there was a deficit in the receipts and payments made in 2012, meaning that the bank paid more than it received, and translated into 1.3 billion against the 1.1million it received.
He stated that the central bank was not hiding any information or any deals since some balances within the reserves do not constitute a receipt of payment.
“Something gold is not a receipt of payment. We just re-value it so you see the reserves going up not on the basis of a net payment receipt, but on the basis of revaluation of the gold balances that we hold,” he said.
He advised the media to be circumspect in its reportage on the nation’s financials to protect its image and integrity from foreign partners who are monitoring and picking up sensitive information about the economy.
Mr Ibrahim Deye, Ranking Member of the Committee, has denied that the PAC on no occasion made it known that the money in question was missing.
He said: “I want to make it very clear that there’s no where the PAC said that 600 million dollars was missing from the Bank of Ghana.”
Officials from the Ghana National Petroleum Corporation also answered questions from the Committee.
Mr Kwaku Agyemang-Manu, Chairman of the Committee, announced that it would begin its sittings in the regions, beginning from the Western Region from next week. GNA