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Bank of Ghana Holds Key Rate, Announces Bond Purchase
Posted On 25 May 2020
By Richard Adorsu-
Governor of the Bank of Ghana, Addison
Photo Credit: Central Banking
NEW AFRICA BUSINESS NEWS (NABN) Accra- Ghana’s Central Bank leave its key interest rate unchanged at 14.5% on Friday and said it had concluded a $1 billion repo facility with the U.S. Federal Reserve to improve the country’s foreign exchange liquidity.
The bank said it expected Ghana’s economy to grow despite the new coronavirus, with preliminary estimates showing economic growth in 2020 was likely to be 2% to 2.5%.
Forecasts had been for gross domestic product to grow 6.8% in 2020. Ghana’s budget deficit widened in the first quarter compared with 2019, to 3.4% of GDP compared with a target of 1.04%, mostly due to a shortfall in revenues, Ernest Addison, Governor of the Bank of Ghana, said at the news conference.
Addison now expected a downturn in economic growth, while the COVID-19 pandemic had put additional strain on the budget.
The shortfall in oil and other tax revenues due to plunging crude prices had left the country with a large financing gap, he said. Current market conditions in the wake of the pandemic would not allow the financing of the gap from the domestic capital markets without significantly increasing interest rates.
The bank had triggered an emergency financing provision allowing it to increase purchases of government securities, and it had purchased 5.5 billion cedis ($958 million) of the government’s COVID-19 relief bond. He said the bank stood ready to continue the assets purchase programme of up to 10 billion cedis.
To further boost foreign exchange liquidity, the Bank of Ghana has concluded a $1 billion repurchase agreement, with U.S. Federal Reserve under its repo facility for foreign and international monetary authorities.
($1 = 5.7400 Ghanaian cedi 05/25/ 2020)
For New Africa Business News Richard Adorsu Reports, Africa Correspondent
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Coronaviruses (CoV) are a large family of viruses that cause illness ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS-CoV) and Severe Acute Respiratory Syndrome (SARS-CoV). A novel coronavirus (nCoV) is a new strain that has not been previously identified in humans.
Coronaviruses are zoonotic, meaning they are transmitted between animals and people. Detailed investigations found that SARS-CoV was transmitted from civet cats to humans and MERS-CoV from dromedary camels to humans. Several known coronaviruses are circulating in animals that have not yet infected humans.
Common signs of infection include respiratory symptoms, fever, cough, shortness of breath and breathing difficulties. In more severe cases, infection can cause pneumonia, severe acute respiratory syndrome, kidney failure and even death.
Standard recommendations to prevent infection spread include regular hand washing, covering mouth and nose when coughing and sneezing, thoroughly cooking meat and eggs. Avoid close contact with anyone showing symptoms of respiratory illness such as coughing and sneezing. Source- WHO
Coronavirus Q&A, World Health Organization
Coronavirus condition overview, World Health Organization
United States, Centers for Disease Control and Prevention
cdc.gov/coronavirus/2019-ncov
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Adorsu I like your reports about Ghana and other part of Africa. Thank you new Africa. Kumasi, GHANA. Jones.
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Why is it very high interest rate to borrow money in Ghana? Thank you for all your reports. Thank you new Africa business news. CONAKRY. Harona
Thank you, Harona is a great question. Cost of borrowing money in most developing Countries, including Ghana are very high, due to the risk involve, with other factors. Will check with the government of Ghana and get back to you with specifics. Thanks for reading, Africa’s fastest growing online newspaper. Please forward http://www.newafricabusinessnews.com