More money found itself outside the banking system in October this year than any other month in 2020, according to the Bank of Ghana’s latest Monetary Indicators.

According to the Central Bank, currency outside banks increased by 44% in October this year.

This suggests that money supply showed significant expansion during the period.

From July 2020 to September 2020, currency outside banks however grew by 41.4%, 39.3% and 43.7% respectively.

This the Central Bank said reflected the complementary monetary policy and fiscal stimulus measures taken by government to support efforts to minimize the impact of the COVID-19 pandemic.

It emphasized that the increase in total liquidity or money supply was mainly driven by its net domestic assets and the commercial banks.

Whilst, net domestic assets increased sharply in October, net foreign assets took a nose dive over the same comparative period. The drop in net foreign assets could be attributed to the covid-19 pandemic.

Both demand deposits, usually current and call accounts as well as savings deposits grew significantly in the first 10 months of this year.

Demand deposits grew by 29.4% in October, 2020, the highest in the year, whilst savings and time deposits grew by 26%, the second highest growth in the year.

At the same time, foreign currency deposits grew considerably in October, than any other months this year.

This indicates that more dollars and other foreign currencies found themselves in the banking system.

Foreign currency deposits grew by 27.3%, the highest for far in 2020.

Interest rates

Interest rate trends on the money market reflected mixed developments as yields on the short to medium term instruments eased, but broadly tightened at the longer end.

On a year-on-year basis, the 91-day Treasury bill rate declined to about 14.1% in October 2020 from 14.7 percent a year ago. Similarly, the interest rate on the 182-day instrument declined to 14.1% from 15.1 percent.