We Exist to Deliver Public Policy Outcomes, Not Profit- BoG

The Bank of Ghana has postulated that the primary objective of central banks is to deliver public policy outcomes, including price stability, financial stability, and the management of the country’s external buffers.

It noted that profit-making is not among the functions.

“A central bank’s financial statements differ in important respects from those of a commercial entity,” it said in a statement.

It further posited that the financial statements of central banks should therefore be read as a record of the financial consequences of the policy operations conducted in the year, not as an indicator of commercial performance.

The BoG explained that a central bank may report a financial loss in a year in which it has delivered its mandate effectively, particularly when the cost of monetary policy exceeds the income generated from its other activities.

This, it said, is not exclusive to Ghana but to other international central banks.

“The Federal Reserve, the European Central Bank, the Bank of England, the Reserve Bank of Australia, and other peer institutions have all recorded substantial losses in recent years arising from similar kinds of monetary policy actions that the Bank of Ghana has implemented.”

Story by Hajara Fuseini

Click to read more: https://opemsuo.com/author/hajara-fuseini/