BOG increases policy rate
4/15/2012 10:00:55 PM -
The Monetary Policy Committee of the Bank of Ghana has increased the policy rate for the second successive time this year.
It went up by a 100 basis points to 14.5 percent.
The policy rate is usually indicative of the rate commercial banks can borrow from the Central Bank.
Announcing the rate at a news conference the governor of the bank of Ghana Kwesi-Amissah Arthur explained that its decision to increase the rate was influenced by fears that the depreciation of the cedi could erode gains made over the years.
The Monetary Policy Committee noted that government was able to raise 3.5 billion Ghana cedis as revenue from January to March this year.
It however ended up spending about a billion cedis more than what it had mobilized in revenue.
That committee noted that Ghana's public debt at the end of February stood at 25.3 billion Ghana cedis.
The country's traditional exports continue to boost export earnings, grossing about 3.8 billion dollars in the first quarter.
On the banking front, financial institutions appear to do well in the area of increasing credit to private businesses.
Banks have also made some strides in collecting most of the loans given out.
On the average banks were lending to individuals and businesses around 28.5 percent.
The country's gross international reserves as at the end of March stood at 4.6 down from 5.4 billion dollars in December.
The cedi also depreciated by 8.3 percent for the first three months of the year.