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Policy rate pegged at 20 percent

Written by  Nov 27, 2017
After its 79th regular meeting of the Monetary Policy Committee (PMC), the Bank of Ghana has reduced the Policy Rate by 100 basis points to 20percent. Addressing the press at the bank’s headquarters, governor of the central bank and chairman of the MPC, Dr. Ernest Addison pointed out that, global growth has strengthened further since the last PMC meeting, sustained by growth in demand and recovery in investments and trade.   Price developments during the first ten (10) months of the year he said continued to show signs of dampening inflation expectations. With headline inflation measured by the consumer price index that was 11.6 per cent for October 2017, a reflection of a steady decline in inflation since the beginning of the year with the exception of April and August, when inflation ticked up slightly. A survey by the bank in October shows improved business and consumer confidence in the economy. According to him, Ghana’s major commodities continue to firm up in the international commodity market pricewise. This includes crude of prices and that of gold which is moderated slightly.   However, cocoa price remained depressed by excess supply due to favourable weather patterns across the West African sub-region. The banking sector looks lucrative although non-performing loan ratio remains high. Total asset base of banks increased to GHC 88.9 billion an October, representing as annual growth of 20.5 percent compared to 23.7 percent same period last year. The growth in assets was mainly funded by deposits which went up by 18.2 percent on a year-on-year basis. Non-Performing Loans ratio declined from 21.9 percent in August to 21.6 percent at the end of October. According to the bank the ratio net of provisions declined from 11.3 percent to 10.5 percent. The industries Capital Adequacy Ratio (CAR) average 15.0 percent at the end of September 2017, signifying above the 10.0 percent prudential requirement. With total public debt, the governor said stood at GHC138.9billion representing 68.6 per cent of GDP at the end of September 2017 from GHC 138.1 billion representing 68.3 per cent of GDP in August 2017. Domestic debt declined to GHC 63.3 billion while external debt went up to GHC 75.5 billion.       By: Daniel Asuku
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