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Mr. Selasi Koffi Ackom, the CEO of the Ghana International Trade and Finance Conference, held a press briefing at the World Bank in Accra on Wednesday, November 29. He emphasized that the losses incurred by central banks should be understood within the broader global economic context, rather than as isolated incidents. The briefing, titled “Unraveling the Global Central Banks Losses,” shed light on challenges faced by central banks worldwide, including geopolitical tension, market volatility, and inflationary pressures from events such as the Russian-Ukrainian war and the COVID-19 pandemic.
Mr. Ackom underscored the importance of examining case studies from various central banks globally to comprehend the interconnected nature of these financial challenges. He provided examples, citing the Switzerland central bank’s losses due to declining share prices and rising interest rates, as well as the IMF’s report indicating slowed growth rates and projections for 2023.
The case study on the Czech Republic highlighted losses attributed to economic recession in the first half of 2022, linked to the Russian-Ukrainian war, an energy crisis, and market deterioration. The National Bank of the Czech Republic reported a loss, mainly due to increased raw material costs and production problems.
The presentation further delved into central bank losses globally, including the Federal Reserve of the USA experiencing challenges in the bond market and the Bank of England facing losses on its bond stockpile. Zambia, despite entering an IMF deal in 2021, still grapples with a severe debt crisis, and the Bank of Ghana recorded losses in 2022 attributed to fiscal debt financing, the COVID-19 pandemic, and the Russia-Ukraine war.
In addressing these challenges, Mr. Ackoom emphasized the commitment of the Bank of Ghana to stability, noting its willingness to absorb losses through a debt exchange program to support the government in managing its debt burden. This commitment demonstrates the central bank’s dedication to stabilizing the financial system amid economic challenges.
REPORT BY JESSICA OKAI