Ghana started the period with an emphasis on the exchange rate, but then tried various forex arrangements and controls before beginning to focus more on inflation and modernising its monetary policy operations. It announced inflation targets from 2007, but there was a continuing concern with the exchange rate and monetary policy was repeatedly derailed by fiscal expansion. The inflation targets were met in 2010-12 but overshot in all other years.

YearsTargets and attainmentClassification
1974-82currency appreciates with SDR vs USD February 1973, then fixed to USD; heavy trade and exchange controls; small number of ‘primary’ banks, dominated by one state-owned commercial bank, various state-owned ‘secondary’ banks, some nonbank financial intermediaries; central bank lends to government and public sector, relies on credit guidelines, supported at times by import deposits, cash and liquid assets ratios, and interest rates; 1978 new government adopts stabilisation measures including move towards flexible exchange rate with major depreciation, major rise in interest rates; early 1979 currency exchange exercise enables government debt to be retired and money supply cut; 1979 military coup, price controls reimposed; 1981 elections, further coup; soaring premium in parallel forex market; 1982 demonetisation of large banknotes, emergency measures including checks on bank accounts, mostly reversed 1983augmented exchange rate fix AERF
1983-20171983 major stabilisation programme which includes some price deregulation and transitional multiple exchange rate system, with exchange rate unification late 1983 followed by depreciations 1984-86 to preserve competitiveness; 1986 temporary second forex window with retail exchange rate set by weekly auction, rates unified with all trades via this auction early 1987, further depreciations but large fall in parallel premium; wider liberalisation of exchange and trade, including wider access to forex auction; as of 1987 credit guidelines remain main monetary instrument, but interest rates adjusted more often, reserve requirements changed less often, while fiscal tightening helps to reduce monetary growth; 1987 discount house set up to develop money market, auctions for sale of treasury bills to non-banks, but other securities markets remain shallow; 1988 forex bureaux allowed, bureaux market absorbs most of parallel market, and bureaux and auction rates gradually converge; 1988 central bank bills introduced, interest rates liberalised; ongoing problem of excess reserves in banks; 1990 retail forex auction replaced by wholesale auction open to forex bureaux, which interacts with nascent continuous interbank market and unifies exchange rates; by 1991 monetary policy operated increasingly through OMOs and interest rates, the latter becoming positive in real terms, while improvement in liquidity management leads to abolition of credit ceilings 1992; 1990s bank reform and restructuring, including some privatisation; major fiscal and monetary slippages in run-up to first multi-party election late 1992, forex intervention 1993; renewed stabilisation attempts from 1995 involve some emphasis on reserve money, but central bank still lending heavily at times to government; some dollarisation; 1996 treasury bills sold in wholesale (not retail) auctions, with primary dealers; 1999 sharp falls in prices of key exports gold and cocoa lead to some use of forex sales to control monetary growth, followed by sharp depreciation from late 1999 and policy slippages 2000; 2001 new central bank law raises independence and limits lending to government, ongoing wider financial sector reforms; recurring fiscal slippages; interbank forex market 2003; as of 2005, central bank uses OMOs with new prime rate to attain monetary growth consistent with inflation objective, in context of floating exchange rate, aided by liquidity and other forecasts of Monetary Policy Committee; interbank money market remains small, secondary trading of government bonds limited; from May 2007 formal (but ‘lite’) inflation target, initially converging and with secondary objective for exchange rate; inflation target overshot 2007 and well overshot 2008-9, 2010 target points adjusted and bands widened, targets attained 2010-12; late 2012 election preceded by fiscal expansion financed partly by central bank; 2013 interest rate corridor widened, standing deposit facility introduced; 2013 renewed rise in inflation, and expected inflation goes above target; ongoing reforms to monetary policy operations, but some fiscal dominance, failure to reinforce central bank independence, 2016 pre-election fiscal expansion, forex regulation and intervention complicate monetary policy, inflation targets overshot 2013-17; statistical database improved over timeloosely structured discretion LSD

Selected IMF references: RED 1974 pp44-6, 50-5, 87; SR 1975 p14; RED 1976 pp46-8; SR 1977 pp1-3; RED 1979 p55; SR 1978 pp1-4, 9-10; RED 1982 update pp6, 14; RED 1983 pp42-3, 57-8; SR 1983 pp16, 17-22, 37-9; RED 1984 pp45-6, 58-9; SR 1984 p4; RED 1985 pp42-3, 53-4; RED 1987 pp41-5, 56-8; SR 1987 pp2-5; SR 1988 pp26-7; RED 1989 pp35-7, 41, 44-6, 60-3; BPSA 1991 pp51-66; SR 1991 pp14-15, 18-19, 22-3; SR 1992 p9; SR 1993 pp6-7; SR 1996 pp8-9; SR 1997 pp8-9, 16; SI 1998 pp22-3, 26; SR 1999 pp26-7; SR 2001 pp9, 11; SISA 2003 pp39-40; SR 2005 p15; SI 2007 pp45, 50-1; SR 2007 pp11-13; SI 2008 pp4-5; SR 2008 pp12-13; SR 2009 pp14-16; SR 2011 pp8, 14, 24; SR2013 pp4-5, 16-21; SR 2014 pp8, 18-20; SR 2017 pp9, 14-17; SR 2019 pp14-17.

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