The Minister of Finance and Economic Planning, Mr. Seth Terkper has stated that the value of the country’s currency stabilised substantially against the foreign currencies in 2012.

According to the minister, Ghana’s financial system faced significant risks to stability in early 2012, emanating from both external and domestic sources. Presenting this year’s budget statement in parliament on Tuesday, Mr. Terkper said threats to stability from external sources were mainly from the sovereign debt crisis in the euro area that spilled into the euro-zone banking.

“Domestic threats to stability emanated mainly from rapid depreciation of the cedi, which constituted the major risk to macroeconomic stability in early 2012.

Measures taken to contain threats to the system included three-consecutive increases of the monetary policy rate that culminated in 250bps increase in the first half of the year and re-introduction of Bank of Ghana bills”, he stressed.

He however added that by the end of 2012, the financial stability indicators pointed to steady improvement, whilst banking system remained strong in 2012 on account of increased capital levels of banks and reduced non-performing loans.

Commenting on the country’s debt Mr Terkper stated that the public debt including government guaranteed debt increased by 23 per cent from US$15,350.08 million in 2011 toUS$18,832.77 million by end-December 2012. This, he said, represents 40.8per cent of GDP in 2011 and 49.4 per cent of GDP by end December2012.

On the petroleum sector, he said government maintained the hedge programme to contain the phenomenon of crude oil price escalation, with the aim of achieving price stability and guarantee the availability of petroleum products on the Ghanaian market.

He explained that it has been a key benefit to stabilisation of the prices of finished petroleum products, which were partially protected by the hedge when crude oil prices soared from $78 per barrel in September 2010 to $128 per barrel in April 2011 and from the lowest average price of $95.77/pbl in June 2012, to the highest price of $124.50 / pbl in March, 2013.