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BUSINESS NEWS | GHANA AND BEYOND

The Monetary Policy Committee of the Central Bank has kept its policy rate unchanged at 14.5 percent following a sudden rise in inflation, the Governor of the Bank of Ghana (BoG), Dr Ernest Addison has said.This follows an earlier March 2020 meeting which saw a 150-basis-point reduction in the monetary policy rate to 14.5 percent, with some commercial banks impressed upon to further slash on lending rates to ease access to credit. Speaking at a press briefing on Friday, May 15 at the central bank, Dr Ernest Addison said; “On the growth outlook, baseline projections show a sharp downturn in GDP growth with the economy operating below capacity in the medium-term. Under the circumstances and given the balance of risks to inflation and growth, the Committee decided to keep the policy rate unchanged at 14.5 percent.”

The Bank of Ghana (BoG) has agreed to loan up to GH¢5.5 billion to government to curtail income revenue shortfalls caused by the coronavirus pandemic by close of the year, Governor of the central bank, Dr. Ernest Addison has disclosed. Speaking at a press briefing on Friday, May 15 to announce the monetary policy rate, Dr Addison explained the BoG’s financing of government’s deficit forms part of the Bank’s assets purchase programme which was set aside due to an agreement with the International Monetary Fund (IMF). Adding, the first tranche of GH¢5.5 billion has been advanced to government at a rate of 14.5 percent which prevails the current monetary policy rate.

The Ghana Statistical Service (GSS) has announced on Wednesday May 13 that the year-on-year inflation of imported goods was 4.9%, while the inflation of local goods was 13.1% on average. The GSS said this is the highest rate of local inflation and the lowest rate of imported goods inflation since the rebasing in August 2019. Month-on-month inflation for imported goods was 0%, while month-on-month inflation for local goods was 4.5%. The main contributor to local inflation was the inflation of locally produced foods, the GSS added. Regarding the national rate, the GSSS said inflation jumped from 7.8% in March 2020 to 10.6% in April 2020, an increase of 2.8%. The GSS blamed the upward trend on the partial lockdown of the Greater Accra, Greater Kumasi, Kasoa and Tema areas due to the coronavirus pandemic.

The Bank of Ghana (BoG) has said on Friday May 15 that its preliminary estimates shows that growth in 2020 is likely to be between 2.0 and 2.5 percent. The central bank said leading indicators of economic activity during the first quarter of the year suggests some slowdown, reflecting the restrictions, social distancing, and the partial lockdown measures introduced by the government in the middle of March. Retail sales picked up in March 2020 due to panic buying which preceded the partial lockdown, while consumption, proxied by Domestic VAT receipts, dipped. The slow conditions in economic activity is reflected in port activities and a sharp decline in tourist arrivals. The slowdown also affected the private sector’s contributions to social security.

The Ghana cedi declined in value by about 1.4% to the US dollar in the first four months of this year. However, as of 13 May 2020, it has depreciated by 1.5% to the American currency, the March 2020 Bank of Ghana Summary of Financial and Economic Data disclosed. The cedi was, therefore, trading at GH¢5.607 on the interbank forex market but higher at about GH¢5.95 at the forex bureau. As of today,17 May 2020, the cedi had declined in value by 1.47% to trade at GH¢5.6155 to the US dollar on the interbank forex market but selling at GH¢5.79 at the forex bureau.

Ghana’s debt stock has shot up to GH¢236.1 billion from GH¢219.2 billion for the first quarter of 2020, according to new figures by the Bank of Ghana. The increase means that Ghana has added GH¢16.9 billion between January to March of 2020. The figures contained in the Central Bank’s Summary of Economic and Financial Data represents an increase of 59.3 percent of the GDP. The debt stock for the domestic side stood at GH¢111.3 billion representing 47.1%, while the external component of the debt reached GH¢124.8 billion.

The Bank of Ghana (BoG) has said it will strengthen the capacity of the ARB Apex Bank to enable it provide support for rural and community banks who are facing liquidity challenges. Speaking at the Monetary Policy Committee (SDI) meeting on Friday May 15, the Governor of the Bank of Ghana, Dr Ernest Addison, said the Specialized Deposits Institutions (SDIs) sector has played a key role in extending access to financial services to small households and businesses. “Such customers are at high risk of being disproportionately impacted by the pandemic, either because they have lost their livelihoods in the informal/micro and small business sector or have lost their jobs.

The Bank of Ghana (BoG) has noted that the use of electronic means of payment went up due to the partial lockdown of Accra and Greater Kumasi following the Coronavirus outbreak. The lockdown led to the decline in cash transactions, the central bank said. President Nana Addo Dankwa Akufo-Addo, as part of his measures to tackle the COVID-19 in Ghana placed restrictions on the movements of person in these areas in the country. At the Monetary Policy Committee (MPC) meeting in Accra on Friday May 15, the Governor of the BoG, Dr Ernest Addison, said the lockdown resulted in a decline in currency as consumers resorted to the use of electronic modes of payment.

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