Bank of Ghana Governor, Dr Ernest Addison has said that credit to the private sector in year-on-year terms, increased moderately by 10.7 percent in August 2023.

This is relative to the 35.8 percent growth recorded back in August 2022 for private sector credit.

Addressing journalists at the 114th MPC press briefing on September 25, Dr Ernest Addison explained that in real terms, credit to the private sector contracted by 21.0 percent relative to a growth of 1.4 percent over the same comparative period, reflecting increased risk aversion of banks during the period.

Touching on the rate at which banks borrowed from each other on the interbank weighted average rate, the BoG Governor said the figure rose to 26.59 percent in August 2023 from 21.93 percent in August 2022, which falls in line with increases in the monetary policy rate.

“Consequently, average lending rates of banks increased to 31.78 percent in August 2023, from 27.96 percent recorded in August 2022,” he noted.

“The banking sector remained stable as the industry’s total assets increased to GH¢244.7 billion in August 2023, from GH¢204.6 billion in August 2022. The growth in banks’ assets was funded by deposits, which grew sharply by 38.9 percent to GH¢189.9 billion from GH¢136.7 billion in the same comparative period. Total borrowings by banks, however, contracted by 41.0 percent to GH¢13.9 billion in August 2023 from GH¢23.5 billion a year earlier,” Dr Addison added.

Meanwhile the Bank of Ghana has the monetary policy rate unchanged at 30% after it held its 114th MPC meeting from September 19 to 22, 2023.

The decision is attributed to all core inflation measures trending downwards, indicating continued easing of underlying inflationary pressures.

MA/NOQ

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