International Monetary Fund Mission Chief to Ghana, Ruben Atoyan, has defended the negative equity position of the Bank of Ghana, emphasising that the institution remains financially stable in relation to its core policy functions and is expected to undergo full recapitalisation in the coming years.
Speaking at a press briefing in Accra on Friday, May 15, after the conclusion of a staff-level agreement with the Government of Ghana under the Policy Coordination Instrument (PCI), Dr. Atoyan explained that negative capital in central banks is not uncommon and does not necessarily indicate insolvency.
He noted that the more relevant measure is whether a central bank is “policy solvent,” meaning it can generate sufficient income to meet operating costs and effectively implement monetary policy.
“It’s not unusual for central banks to have negative capital, but what is important is what we call policy solvency,” he said.
Based on the Bank of Ghana’s 2025 financial statements, he stated that the institution continues to meet this policy solvency requirement despite reporting losses and a negative equity position.
“The fact that the income the central bank is generating can cover all the costs and operational costs and costs of doing monetary policy… Bank of Ghana, based on financial statements from 2025, has been policy solvent,” he explained.
Dr. Atoyan further indicated that recapitalisation of the central bank has already been incorporated into Ghana’s debt sustainability analysis, which is expected to be published alongside the staff report.
He added that IMF projections assume substantial recapitalisation support, though they remain intentionally cautious, as central banks may over time generate profits that help rebuild their balance sheets.
“We think we are actually overly conservative… central banks, by running policies, can generate significant profits and these profits should be used to recapitalise the central bank,” he said.
According to him, this strategy could reduce reliance on direct fiscal support from government, thereby easing pressure on public finances.
Dr. Atoyan expressed confidence that full recapitalisation of the Bank of Ghana could be achieved by 2032 or possibly earlier, depending on economic and policy conditions.
He also highlighted that 2025 placed significant strain on the central bank’s balance sheet due to several cost-related factors.
These included high liquidity management expenses from open market operations, elevated interest rates during efforts to curb inflation, and depreciation of the local currency, all of which negatively affected the Bank’s accounting position.
“At the same time, some of these pressures were partly offset by valuation gains on gold holdings,” he added, noting that gold sales conducted in late 2025 also improved the central bank’s income performance.
The IMF further acknowledged losses linked to the Domestic Gold Purchase Programme but said discussions are ongoing with authorities to reduce and eventually phase out such costs.
Dr. Atoyan’s comments come amid ongoing public debate over the Bank of Ghana’s 2025 financial results, which showed widening negative equity despite improvements in inflation, exchange rate stability and foreign reserves.
His clarification aligns with earlier government explanations that the central bank’s balance sheet reflects the cost of macroeconomic stabilisation efforts rather than operational failure, with emphasis placed on maintaining overall price and financial stability.