BoG maintains prime rate at 12.5%

The Monetary Policy Committee (MPC) of the Bank of Ghana has maintained the prime rate at 12.5 per cent.

Addressing a press conference in Accra, the Governor of the Central Bank, Dr. Paul Acquah, said the continued load shedding exercise and unpredictable energy supply to productive sectors of the economy informed the MPC's decision on the prime rate.

Dr. Acquah said unstable price movements of crude oil in the world market also informed the decision.

He however noted that credit to the private sector has gone up.

“The growth in the financial sector is also taking place against the background of improved financial sectors and soundness indicators. The banking systems were capitalized, profitable and efficient…the industry recorded capital adequacy ration of 17 percent as of January 2007 compared with 16.1 percent the same period in January 2006 and against a required capital adequacy ratio of 10 percent,” he said.

Dr. Paul Acquah however indicated that the economy is positioned on the path of growth with inflation pointing towards a single digit. Business and Consumer confidence indicators are also very high, he noted.

He said growth in exports during the third quarter of 2006 was sustained with a marginal increase of 1.1 per cent.

Dr. Acquah said the total imports also rose by 22 per cent last year to over 6.7 million dollars. He said total government revenue including grants for the first quarter of this year fell by 6.9 per cent from over ¢39.8 billion to ¢31.9 billion.

He said total expenditure however went up by 2.4 per cent, amounting to ¢39.8 billion. But one significant development according to Dr. Acquah is an increase in credit to the private sector which went up by 32.6 per cent

Meanwhile, the double pricing of goods and services according to the Central Bank will take off in May this year with a rigorous educational campaign on samples of the new Ghana cedi.