Governor of the Bank of Ghana (BoG), Dr. Ernest Addison has ascribed the hike in public debt to the depreciation of the cedi.
The Ghana cedi neared a four percent depreciation to the US Dollar on Tuesday in the latest economic and financial data released by the Bank of Ghana (BoG), indicating that the country’s debt stock reached GHC139billion as at the end of June this year.
According to Dr Addison, the current financial instability in the country and its threat on the economy, triggered the Bank of Ghana’s decision to maintain the policy rate at 21 percent.
Speaking to the media, Dr Ernest Addison pointed out that the focus to transform the economic canker is currently on banks since they can influence the current changes in the economy.
He also indicated the increase in capital requirement to ¢400 million was influenced by current developments in the economy adding that it is required of all commercial banks to have a minimum capital level of ¢400 million by December 2018.
According to him, “a bank that can mobilize adequate resources and finance big-ticket transactions is crucial in being able to deliver that transformation and this is why we are emphasizing the strength of the capital of the banks”.
the Cedi The Ghana Cedi neared a four percent depreciation to the US Dollar on Tuesday as demand by importers continued to rise which means that the local currency declined in value by 0.4 to the American currency last week.
West Africa’s worst performing currency; the Ghana Cedi has been projected to depreciate by about 5 percent this year which implies it will trade at two cedis to a dollar by the end of December.
Analysts expect the Central Bank to reinforce the exchange rate policy and liquidity management efforts to the local currency.
Ghana’s debt stock The country’s debt stock reached ¢139 billion as at the end of June this year, the latest economic and financial data released by the Bank of Ghana (BoG) has revealed.
The data revealed showed that from May to June 2017, the debt stock went by ¢1.4 billion.
Though not clear what might have caused the spike in the debt stock, some believe it could be due to fresh borrowings, cedis’ marginal depreciation or some additional commitment made by government during this period.