By Tony Nwaka
Ghana Commercial banks have advanced more than three billion cedis to businesses post-Covid-19 restrictions.
This step was taken by the recent Bank of Ghana coronavirus measures instituted by the regulator to help boost credit to businesses as well as market liquidity.
Deputy Governor of the Bank of Ghana, Elsie Addo Awadzie made this known during a webinar on the topic: ‘Sustainable and Responsible Investments on the Road to post-COVID” organised by the University of Ghana Business School (UGBS) to engage industry personalities on topical business as well as National issues.
Awadzie stated that the improved lending to businesses was also influenced by reviewing the policy rate and other monetary measures.
“By virtue of the fact that, we reduced our policy rate, which is the benchmark, then the all the banks also had to necessarily have to reduce their lending rate,” Deputy Governor of the Bank of Ghana said.
According to her, “the banks’ lending rates are based on the Ghana Reference Rate which is a combination of Bank of Ghana’s policy rate, 91 day Treasury Bill rate and Interbank lending rate.
“So looking at the fact that they cut their policy rate by 150 basis point, it was just right that the banks responded.”
Commercial banks of Ghana logos
The seminar had finance economist, Dr Lord Mensah, other lead speakers and connected to more than 200 participants online in the program.
The second Deputy Governor disclosed that the measures that were introduced recently is just a short term measure and would be reviewed when the need arises in order to take the decision soon.
She noted that these measures were aimed at improving liquidity, introduce several regulatory initiatives as well as talk about the significant cut in the policy rate, reviewing the percentage of money that banks can hold at the Bank of Ghana.
“We were very clear about the fact the capital and liquidity reliefs that we have provide were temporary and we expect that we would unwind from that after COVID 19,” she added.
However, some businesses have complained that they have not witnessed any significant reduction in interest rates on exiting loans as well as fresh ones.
The second deputy governor of the Bank of Ghana while responding to questions of concern on the commitment of the commercial banks on recent regulatory issues declared that that banks have really complied by reducing their interest rates in line with recent regulatory measures.
Speaking on what the regulator is doing to promote responsible and Green financing in the country, the Deputy Governor assured of the Bank of Ghana’s commitment to putting in the right program and policies that will support the initiative.
source: footprint2africa.com
