Commercial banks in the country have advanced more than three billion cedis to businesses post-Covid-19 restrictions.

This was influenced by the recent Bank of Ghana coronavirus measures instituted by the regulator to help improve credit to businesses as well as market liquidity.

Deputy Governor of the Bank of Ghana, Elsie Addo Awadzie disclosed this during a webinar organised by the University of Ghana Business School (UGBS).

The series is part of efforts to engage industry persons on topical business and National issues as well.

Improving market liquidity

According to the Deputy Governor of the Bank of Ghana, the improved lending to businesses was also influenced by reviewing the policy rate and other monetary measures, adding that “by virtue of the fact that, we reduced our policy rate, which is the benchmark, then the all the banks also had to necessarily have to reduce their lending rate”.

She noted that banks’ lending rates are based on the Ghana Reference Rate which is a combination of Bank of Ghana’s policy rate, 91 day Treasury Bill rate and Interbank lending rate”.  

“So looking at the fact that they cut their policy rate by 150 basis point, it was just right that the banks responded," she added.

The Covid, Business and Society Seminar was on the topic, 'Sustainable and Responsible Investments on the Road to post-COVID."

The seminar, had finance economist, Dr Lord Mensah bringing to two the number of lead speakers at the programme.

It connected more than  200 persons online who participated in the program. They later had an opportunity to the second engage the governor through questions and answers.   

Will Bank of Ghana maintain recent monetary measures?  

Speaking on the same program, the second Deputy Governor noted that measures that were introduced recently is just a short term measure and would be reviewed when the need arises, “ we are reviewing the situation and would take the decision soon. 

These measures were aimed at improving liquidity introduce several regulatory initiatives.  One can talk about the significant cut in the policy rate, reviewing the percentage of money that banks can hold at the Bank of Ghana.

She added that “we were very clear about the fact the capital and liquidity reliefs that we have provide were temporary and we expect that we would unwind from that after COVID 19”

Reduction in interest rates on the market

Some businesses have complained that they are still yet to witness any significant reduction in interest rates on exiting loans and even fresh ones.  This has led to some question the commitment of the commercial banks to respond to recent regulatory. But responding to these concerns, the second deputy governor of the Bank of Ghana maintained that that banks have indeed reduce their interest rates in line with recent regulatory measures, adding that “our checks suggest that the commercial banks are complying”  

The Deputy Governor also talked about what the regulator is doing to promote responsible and Green financing in the country.

She expressed the Bank of Ghana’s commitment to putting in place all the right program and policies to support this initiative.