17/08/2022
Measures announced today by BoG to tackle inflation and stabilise the cedi:
1. Raised the Monetary Policy Rate by a significant 300 basis point to 22%.
2. Raised the primary reserve requirement of banks from 12% to 15% to be implemented in a phased manner:
(i) 13% from 1st Sept, 2022
(ii) 14% by 1st Oct, 2022
(iii) 15% by 1st Nov, 2022
(3) Boosting supply of foreign exchange and strengtheing BoG’s FX auctions by “working collaboratively with the mining firms, international oil companies, and their bankers to purchase all foreign exchange arising from the voluntary repatriation of export proceeds from mining, and oil and gas companies.”
The last measure will require a lot of pressure and persuasion on the extractive industry players; but a an extremely necessary ask. The role of the telcos in the repatriational pressures on the cedi should not also be underestimated. If these profit-making entities choose not to cooperate they risk making the case of the imposition of a hefty windfall tax, in my view, very very difficult to resist.
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