According to the Bank of Ghana’s Monetary Developments report, the average rate on 3-month term deposits however remained unchanged at 11.50 percent.
It said the general decline in nominal interest rates and the recent jump in inflation pushed real interest rates significantly down.
The report explained that credit to the private sector and public institutions increased by GH¢6.3 billion (13.77 percent) on year-on-year basis in June 202.
This is down from GH¢7.1 billion (18.37 percent) in the corresponding period of 2019.
Instructively, private sector credit accounted for a share of GH¢4.98 billion (79.1 percent) compared with GH¢5.7 billion (81.5 percent) during the same period in 2019.
The flow of credit to the private sector the report said was concentrated in five sub-sectors. They were services that is transport, storage, and communication; agriculture, forestry & fishing and manufacturing and construction.
However, outstanding credit to the private sector at the end of June 2020 was GH¢45 billion compared with GH¢40.1 billion last year.
In real terms, private sector credit expanded marginally by 1.2 percent compared to 8.6 percent in June 2019, thus, lower than the long-term trend.
Meanwhile, developments in the money market indicated downward trends in interest rates at the short end of the market, and mixed trends at the medium to long-term segments of the market in June 2020.
The weighted average interbank rate declined to 13.82 percent in June 2020 from 15.20 percent in the corresponding period of 2019, reflecting the monetary policy stance.
The 91-day Treasury bill rate declined to 13.97 percent in June 2020 from 14.75 percent a year ago. Similarly, the interest rate on the 182-day and 364-day instruments declined to 14.05 percent and 16.87 in June 2020 from 15.23 percent and 17.92 percent respectively in June 2019.
Credit: The Finder
(By Augustine Amoah)