Currency outside banks grew slightly better in the final quarter of last year particularly in the month of November 202, data from the Bank of Ghana has revealed.  

It meant more notes and coins were in circulation amongst households and businesses during the final quarter of last year to stimulate spending, and consequently economic growth.

The increase money supply may also be due to the December 2020 elections where the political parties spent significantly on branded collaterals and advertising.

The growth of currency in circulation hovered around 37% on the average, from June to August last year, but moved above 40% in the last quarter of the year.  For instance in October, November and December 2020 were 44.0%, 46.4% and 45.5% respectively.

That could have facilitated spending in the various sub-sectors of the economy and as a result in an increase in the total value of goods and services during quarter four.  

This could also suggest that the economy is very liquid and had begun it recovery from the last quarter of 2020.

Demand deposits, usually current and call accounts witnessed its highest growth of 37% in December last year.

Banks prioritized demand deposits because it comes virtually with no cost and therefore such growth add to the profit margins of the financial institutions.

For Savings & Time Deposits, it also witnessed good growth in the last four months of 2020.

Foreign Currency Deposits

Growth of foreign currency deposits was however mixed throughout the year 2020.

It recorded its highest growth in 2020 by 27.3% in October and took a sharp nose dive in November, recording18.2% growth. It further went down, growing by13.2% in December 2020.

The growth of foreign currency deposits help track the performance of the local currency against the foreign currencies, particularly the US dollar.

So far this year, the cedi has remained relatively stable to the US dollar, recording no gain or loss in value.