The Financial institution of Ghana has reiterated its assertion that the inflation focusing on mechanism is the simplest financial coverage formulation technique to assist to drive inflation down.
This comes regardless of issues by some specialists that the IT framework had outlived its usefulness and can’t be efficient towards value pressures.
Talking on the launch of the ebook titled “Central Banking in Ghana and the Governors (Institutional Progress and Financial Growth)”, First deputy Governor of the Financial institution of Ghana, Dr. Maxwell Opoku-Afari acknowledged that, “I discovered the writer’s exposition on the instruments of financial coverage insightful, particularly the direct management and inflation focusing on, expansionary and contractionary financial coverage stance and up to date financial methods.
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“In all of those narratives, inflation focusing on is deemed probably the most strong financial coverage formulation technique that has impacted positively on the targets of central banks, together with the Financial institution of Ghana,” he stated.
In 2007, the Financial institution of Ghana adopted an inflation focusing on (IT) framework, which was supported by a versatile change price regime.
Inflation focusing on is a financial coverage framework the place the central financial institution units a particular goal for the inflation price and adjusts its financial coverage instruments to attain that focus on.
The first purpose of inflation focusing on is to take care of value stability, which is taken into account an important prerequisite for sustainable financial progress and growth.
The Financial institution of Ghana’s inflation goal was set at 8% with a symmetric band of two%, which signifies that the financial institution aimed to maintain inflation inside a spread of 6% to 10%.
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