The Bank of Ghana (BoG) says it has no intention of deliberately keeping policy rate high to profit from it.
The statement follows reports that the central bank has been increasing the rate to gain from the policy.
The BoG said it remains committed to pursuing sound monetary policies aimed at achieving a stable level inflation in line with its medium-term target.
Speaking to Joy Business, Director of Communications Bernard Otabil said the bank is poised to achieve a stable inflation.
"Achieving low and stable inflation helps to promote exchange rate stability under a floating currency regime is key"
"The BoG is committed to pursuing sound monetary policies aimed at achieving a stable level inflation in line with its medium term target”, he said.
Mr. Otabil added that the bank is working hard to achieve economic prosperity in Ghana and improving the welfare of the Ghanaian population.
He refuted the arguments that central banks all over the world use policy rate hikes to induce profit.
“Anyone who would make such a claim, perhaps, does not understand central banking fully because high interest rate is rather inimical to the operations of central banks. High interest rates rather raises the cost of our open market operations, and leads to large losses."
He pointed out that central banks are always faced with the challenge of increasing policy rates to achieve price stability.
“Central banks are not commercial banks and do not seek profits, nor do they face the same financial constraints as private institutions. Central banks, by the nature of their work, are supposed to provide a public good and that public good is low and stable inflation which comes at a cost”, he said
Credit: James Eshun