Accusations have surfaced that the Bank of Ghana’s (BoG) liquidity management operations in 2025 resulted in a significant transfer of public wealth to commercial banks, contributing to the central bank’s substantial losses while commercial entities reported strong profits. The allegations were made by Dr. Gideon Boako, Member of Parliament for Tano North, in a statement reacting to the BoG’s 2025 financial statements.
Context: Liquidity Management and Central Bank Operations
Central banks manage the money supply in an economy through various tools, including Open Market Operations (OMO) and adjustments to the Cash Reserve Ratio (CRR). OMO involves the buying and selling of government securities to influence the amount of money banks hold. The CRR is the percentage of a bank’s total deposits that it must hold in reserve, either in its vault or at the central bank.
Historically, the Bank of Ghana utilized a dynamic CRR mechanism. A shift away from this mechanism, particularly towards more expensive OMO instruments, is central to the recent controversy. The BoG’s financial performance is closely watched as it reflects the health of the nation’s financial system and the effectiveness of its monetary policy decisions.
OMO Costs Skyrocket, Critics Allege Wealth Transfer
Dr. Boako pointed to a sharp increase in the BoG’s OMO costs, which reportedly surged from GH¢8.2 billion in 2024 to GH¢16.73 billion in 2025. He attributed this escalation to the central bank’s decision to abandon the dynamic CRR mechanism and revert to what he described as “the most expensive liquidity-management tools.” This occurred despite a reported decline in inflationary pressures, which would typically suggest a less aggressive approach to liquidity management.
“BoG booked the losses, commercial banks booked the profits,” Dr. Boako stated, characterizing the situation as a direct “wealth transfer from the public balance sheet to private balance sheets.” He argued that such actions are indefensible and do not constitute sound monetary policy.
Foreign Exchange Rules and Liquidity Injections
Further criticism was leveled against the BoG’s handling of foreign exchange reserve-holding rules. Dr. Boako alleged that the Bank reversed these rules in a manner that injected liquidity back into the financial system. Consequently, the BoG was compelled to use high-interest OMO instruments to mop up this excess liquidity, leading to increased operational costs and weakened balance sheet.
This cycle, according to the MP, unnecessarily weakened the Bank’s financial standing. The practice of injecting liquidity only to withdraw it at a higher cost is seen as an inefficient and costly strategy.
Gold Operations and Policy-Manufactured Losses
The MP also scrutinized the Bank’s foreign exchange and gold operations, labeling them as operating at a “structural loss.” He cited a GH¢9 billion loss recorded under the Bank’s gold purchase program. Dr. Boako questioned the rationale behind selling 18 tonnes of gold reserves while still incurring substantial losses at the year’s end.
He explained that the BoG allegedly buys foreign currency or gold at market rates but then values or sells them at an artificially lower official rate. This discrepancy, he contended, results in “policy-manufactured losses” rather than unavoidable economic consequences. Such practices raise concerns about the transparency and efficiency of the central bank’s reserve management.
Implications for Confidence and Credibility
Dr. Boako warned that the continuation of such financial losses at the central bank could have serious repercussions. Undermining the BoG’s financial health could erode confidence in Ghana’s entire financial system. The institutional credibility of the central bank is paramount for economic stability and investor assurance.
“Credibility, once broken, is expensive to rebuild,” he emphasized, highlighting the long-term damage that such practices could inflict on the nation’s economic standing and its ability to attract investment. The perceived mismanagement of public resources and the central bank’s balance sheet could deter both domestic and international stakeholders.
What to Watch Next
Moving forward, attention will be on the Bank of Ghana’s response to these serious allegations and its plans to address the reported financial losses. Investors, financial institutions, and the public will be closely observing the BoG’s transparency regarding its operations, its future liquidity management strategies, and any reforms aimed at strengthening its balance sheet and restoring confidence. The upcoming financial reports and policy pronouncements from the central bank will be critical indicators of its commitment to sound financial stewardship.
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