Ghana’s gross foreign reserves increased to $3,973m in 2010 – Dr Duffuor

Dr. Kwabena Duffuor

Ghana’s stock of gross foreign reserves increased to 3,973 million dollars in October 2010 from 3,165 at the end of December 2009, Dr Kwabena Duffuor, Minister of Finance and Economic Planning announced in Accra on Thursday.

He said it was an indication that government had increased the country’s cover of imports of goods and services from 1.8 months in 2008 to 2.4 months in 2009, and to 3.2 months in 2010.

Dr Kwabena Duffuor made the announcement when presenting the 2011 Budget and Government Fiscal Policy in Parliament.

He said Ghana’s balance of payments registered a surplus of more than 100 million dollars in the first nine months of 2010, with a projected surplus of 315 million dollars for the fiscal year describing the feat as the first ever chalked out in many years.

On inflation, the Finance Minister said the steady decline in the inflation rate provided concrete evidence of an economy that was recovering from the deep crisis at the end of 2008.

Dr Duffuor said the consumer price index released by the Ghana Statistical Service for October this year showed a steady decline in the inflation rate from the peak of 20.7 per cent in June 2009 to 9.38 per cent in October this year.

“This steady decline is attributed largely to our prudent fiscal management, continued monetary restraint, supported by a good food harvest,” he said.

He said food inflation had declined from an average of 15.8 per cent in 2009 to 5.6 per cent in October this year adding that over the same period, non-food inflation dropped from an average of 21.8 per cent to 11.8 per cent.

Dr Duffuor observed that the appreciation of the cedi contributed significantly in lowering inflation in the country.

He said the general downward trend in interest rates which began in June 2009 was continuing, adding that the Central Bank policy rate had fallen steadily over the period, reaching 13.5 per cent in July 2010.

Dr Duffuor observed that all short term interest rates on the money markets had fallen in the last 10 months of the year.

He noted, however, that commercial banks, had been less responsive to the general fall in interest rates and the inflation rate, citing high risks associated with lending to small and medium size businesses as the major cause of their inability to reduce their lending rates.
Source: GNA

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