This was revealed by the Governor of the Bank of Ghana (BoG), Dr. Ernest Addison on Monday, September 29, 2020.
The Governor also, estimated growth in 2020 will be between 2 and 25 percent.
The decision was taken at the Monetary Policy Committee.
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Dr. Addison further noted that Ghana’s currency will continue to remain stable and strong in the short to medium term.
Dr. Ernest Addison said the significant decline in non-resident investors’ shares in Ghana’s domestic debt, for example, helps with lowering the Cedis’ vulnerability to any possible capital flight, which bodes well for the currency’s stability.
Compared to the 9.3 percent decline in the value of the Cedi against the US Dollar in the first nine months of 2019, the local currency depreciated by only 2.9 percent from January to September 2020.
“If you look at the domestic debt between March 2018 and now, it’s almost been stable. But something very interesting has happened, the resident investors say their share declined from over 13% to just about 18% or so, and then the domestic investors are saying their shares go up in the bank. It says a lot about vulnerability. We’ve been able to reduce the share of non-residents and that’s a very serious vulnerability that we’ve been able to address between 2018 and now. The question is that where that capacity did counts for domestic investors to be able to substitute for all these non-resident loans that have gone out. The recapitalization of the banks has had so much capital that they are able to substitute for non-resident investors and that has allowed the Cedi to be very stable over the last year and a half,” he said.