Bank of Ghana cuts policy rate to 16%
The Bank of Ghana today announced a cut in the policy rate from 17 per cent to 16 per cent. A reduction of 100 basis points.
In a press release copied to ghanabusinessnews.com, the Bank indicates that inflation has steadily declined from 15.4 per cent at the end of 2016, to 11.8 per cent in 2017 and further down to 9.4 per cent in 2018, supported in large part by non-food inflation.
The Bank’s latest forecast shows that inflation will remain within the target band of 8±2 percent over the forecast horizon, barring any unanticipated shocks, the release said.
The central also also noted that global inflation remained relatively stable through the year.
It also said, the clean-up exercise in the banking sector, protected deposits of over 1.5 million depositors with deposits of GH¢11.6 billion, which includes deposits of savings and loans companies, rural and community banks, investment fund managers, pension funds, and life insurance companies with the banks.
The Bank is therefore projecting that, there will be a need to focus on reducing the high non-performing loans in the sector and addressing the risks associated with the high degree of interconnectedness in the financial system which will require close monitoring to ensure financial stability.
It pointed further that a total of 23 banks met the minimum requirement after the recapitalization exercise which ended in December 2018. These banks it said, are sound, liquid and well-capitalized, and well-positioned to translate the gains made so far from two years of far-reaching reforms to the rest of the economy.
At the end of December 2018, total assets of the banking sector grew by 14.7 per cent year-on-year to GH¢107.3 billion. Going forward, growth in industry assets is expected to rebound as banks deploy their newly-injected capital towards financial intermediation, the release said.
Asabea Akonor
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