Use available tools to fight rising inflation to avert economic instability – World Bank boss to BoG, others

World Bank President, David Malpass, is urging the Bank of Ghana and other financial regulators around the world to use all available tools to help check the rising inflation rate.

The general price levels of good and services in the country hit a record level of 19.4% in March 2022.

The same can be said for other countries, such as the USA and UK, which has seen inflation rate reaching historic levels and threating economic stability.

But speaking from Washington D.C, Mr. Malpass, said the situation calls for some though regulatory measures to help minimise the impact of this development especially on the poor.

“The Central Banks can use tools that add to supply and that allows capital accumulation to improve”. “They’ve been talking about not just interest rates, but also shrinking the balance sheet which I think will have a simulative effect on the global investment climate. This is because it will occupy lesser capital of Central Banks from the current situation”, Mr. Malpass said.

He further said the Central Bank has regulatory policies that can be used to encourage more investments in small and new businesses to expand and create jobs.

“Also, they [Central Banks] have regulatory policies that can be used to encourage more investments in small businesses, in new businesses that will be the dynamic portion of a new economy.”

“Again I stressed market forward looking programmes. So announcements on currency stability having impact, announcement on capital accumulation having positive impact as the world tries to control these crisis [COVID-19 pandemic, Russia/Ukraine war]”, he added.

The Bank of Ghana recently increased the policy rate by 250 basis points to 17% to help fight inflation, reduce the free fall of the cedi then and overall help address the challenges within the economy.

Source: JoyNews