Ghanaian Bankers to Avoid Interest Rates Demise
A year ago, Ghanaian bankers were expecting to enter an era of low interest rates.
These had been
slashed from 18% in early 2010 to 12.
5% by July 2011.
And with inflation thought to be heading down,
many...
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Ghanaian Bankers to Avoid Interest Rates Demise
A year ago, Ghanaian bankers were expecting to enter an era of low interest rates.
These had been
slashed from 18% in early 2010 to 12.
5% by July 2011.
And with inflation thought to be heading down,
many forecasted further cuts.
Ghana’s situation soon changed, however.
With imports surging and liquidity building up quickly amid
strong economic growth, the cedi started to slide in the last quarter of 2011.
The problem worsened
early this year, with the currency depreciating 15% versus the dollar by mid-June.
The central bank, to
stem the fall and reduce the supply of cedis in circulation, was forced to increase rates to 15% and
tighten lenders’ reserve requirements.
Banking Boost
Banks have in some ways benefited, thanks to higher trading spreads in the foreign exchange market
and yields on government bonds.
“There’s volatility in the foreign exchange market, so at the moment
banks are making money,” says Alhassan Andani, head of
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