- Policy rate maintained again
Of the more than GH¢16billion spent on some nine banks to protect depositors’ funds after they had their licences revoked by the regulator, a little over 8 percent has been recovered by the receiver, Governor of the central bank, Dr. Ernest Addison, has said.
Asked by the B&FT – at a press conference in Accra to announce the policy rate – how much has been recovered from the defunct banks, Dr. Addison said only GH¢1.4billion has so far been recovered from the collapsed banks’ assets – adding that this is unimpressive considering the amount involved.
“The receiver has been able to make some recoveries, but they are not as impressive as expected. The last time I checked, about GH¢1.4billion had been recovered; and we are looking at a loan portfolio of over GH¢16billion for those banks that were resolved. So, out of GH¢16billion if we have recovered just GH¢1.4billion; it tells you that there is a lot of work to be done.
“We have seen in the papers that the receiver has auctioned cars and other properties of those banks – trying to find more money to meet some of the requirements of paying depositors’ funds. So yes, the effort is there; but the progress in terms of the amount of cedis that they are recovering is slow,” he said.
Policy rate maintained
The Monetary Policy committee (MPC) of the Bank of Ghana has, for the sixth consecutive time, maintained policy rate at 16 percent. The last time it was changed was a year ago, when it was cut by 100 basis points to the current rate. The Committee explained that even though the inflation outlook remains balanced it still has to be cautious, hence the decision to hold it.
“Overall, the economy presents fairly resilient and robust performance with regards to output growth and a strong trade and payments position. The economy is positioned firmly on the path of stability, with inflation forecasted to stay within the medium-term target band of 8±2 percent – barring any unanticipated shocks.
“Under these circumstances, the Committee viewed risks to the inflation and growth outlook as broadly balanced, and therefore decided to keep the Monetary Policy Rate unchanged at 16 percent while standing ready to take decisive policy actions when necessary to ensure that inflation remains within the target band,” Dr. Addison said.
The decision comes as no surprise at all, since prior to this announcement the IMF, Economist Intelligence Unit (EIU), Data Bank Research and some other analysts had all predicted the policy rate to be held: giving reasons such as protecting the interests of foreign investors holding local currency bonds; fiscal risks that exist due to the December general election; and the negative effect a cut may have on stability of the cedi – especially now that it has appreciated by 0.3 percent in January compared to a 2.6 depreciation in the same period last year.