Managing Director of Bank of Africa, Kobby Andah, has expressed confidence that the current economic situation which poses high risk to lending will not last for long.

According to him, banks have no option but to implement the various measures taken by the Central Bank to control the rising inflation and slowdown the depreciation cedi.

He told Joy Business that although it’s a difficult situation for both banks and ccustomers the challenges will be over soon.

The country’s inflation has increased to more than 30%, causing an increase in monetary policy rate and lending rates as well.

The situation is said to have impacted on businesses and bank’s profit since cost of operations is expected to go up.

According to Mr. Andah, these are storms that will be temporarily and the banks won’t shy away from supporting businesses to revive the economy.

“The present situation presents a dilemma for banks in assets allocation. The decision is whether to go for government securities which has high yields or mobilise deposits through lending.The economic situation has enormous risks on the lending side because interest rates are high with the rising Treasury bill rates -about 30% – which banks can’t lend below that”.

“A typical corporate institution will borrow at 30%, but the worry is whether the businesses can use the funds at such a cost productively and pay back”, he pointed out.

“We understand what the Bank of Ghana need to do to hold back inflation and thereby stabilize the cedi. I think this is a storm we need to ride, I don’t think it will last and there’s still a strong allocation of assets in private sector lending” he told mentioned.