Debt financing, expenditure are key risks to liquidity, exchange rate – BoG

The Bank of Ghana has identified developments in government spending and debt financing as key fiscal risks that could affect liquidity and the exchange rate. The Governor of the Bank of Ghana, Dr Johnson Asiama, said the Monetary Policy Committee will closely assess how fiscal developments for the remainder of 2026 interact with monetary policy. Speaking at the opening of the 132nd MPC meeting, Dr Asiama said an increase in government spending could lead to a higher share of short-term domestic debt.

He explained that this could have implications for liquidity conditions in the economy. “If spending is to rise, the share of short-term domestic debt could also rise,” he said. The Governor also noted that the completion of Ghana’s external debt restructuring could raise debt-service obligations, with potential implications for liquidity and the exchange rate. “Completion of the external debt restructuring could raise debt service obligations, each of which would have implications for liquidity and the exchange rate,” he added. Dr Asiama said the…