Home | Goldstreet Business
Monday, June 27, 2022
  • Home
  • General News
    • Extractives
    • Auto
  • Business
    • Banking and Finance
    • AgriBusiness
    • Insurance
    • Mining
    • Oil and Gas
    • Real Estate/Housing
  • News
    • Top Stories
    • Agriculture
    • Maritime/Aviation
    • Energy
    • Education
    • Construction
  • Technology
    • ICT
    • Telecom
  • World
    • Africa
    • International
  • Editorial/Features
  • GSB Data Services
No Result
View All Result
  • Home
  • General News
    • Extractives
    • Auto
  • Business
    • Banking and Finance
    • AgriBusiness
    • Insurance
    • Mining
    • Oil and Gas
    • Real Estate/Housing
  • News
    • Top Stories
    • Agriculture
    • Maritime/Aviation
    • Energy
    • Education
    • Construction
  • Technology
    • ICT
    • Telecom
  • World
    • Africa
    • International
  • Editorial/Features
  • GSB Data Services
No Result
View All Result
Gold Business Logo
No Result
View All Result
Home Business Banking and Finance

COVID 19 curbs liquidity growth

October 22, 2020
in Banking and Finance, Business, Health, Top Stories
0
COVID 19 curbs liquidity growth
Share on FacebookShare on Twitter

Latest data emanating from the Bank of Ghana in its newly   released Quarterly Bulletin covering the second quarter of 2020, illustrates the effects of the arrival of   COVID 19 on liquidity in the Ghanaian economy. Inevitably the slump in economic activity brought about by the pandemic and the requisite public policy responses imposed by the government reduced liquidity growth in the economy. But it also illustrates fundamental shifts in the behavior of private sector economic actors – enterprises and households alike – as a result of the uncertainties thrown up by the arrival of the pandemic in Ghana and the socio-economic restrictions imposed to curb its spread. Developments in monetary aggregates for the second quarter of 2020 showed a slowdown in the growth of broad money supply (M2+) on year on year basis. Growth in broad money supply (M2+) reduced on account of a significant decrease in the growth in Net Foreign Assets (NFA) which was moderated by an increase in Net Domestic Asset (NDA). The decline in the growth of NFA of depository corporations was mainly due to significant reduction in the NFA of Domestic Money Banks (DMBs).

This reflects a retreat to home territory by banks at a time that the global economy was being faced into domestication by travel restrictions and international trade supply chain disruptions. The resultant appreciation of the cedi has provided further impetus to keep faith with domestic financial assets.

RELATED POSTS

Finance, Risk, and Financial Risk Management: From a Business Manager’s Standpoint

MTN Ghana extends coverage to 5.3 million Ghanaians in 2021- CEO

Curiously however, the growth in M2+ was higher than what was recorded for the first quarter of 2020 although economists see this as primarily the result of a slow start to the year with regards to economic activity in Ghana.

Broad money supply developments in the monetary aggregates showed a slowdown in the growth in M2+ on a year-on-year basis from 22.10 percent in the second quarter of 2019 to 20.33 percent in the second quarter of 2020. The stock of M2+stood at GH¢100,498.91 million by the end of June, compared with GH¢83,517.12 million a year earlier and GH¢92,905.07 million by the end of then first quarter of 2020.

The decrease in year-on-year growth of M2+ during the second quarter of 2020 reflected in the decline in growth of demand deposits and foreign currency deposits relative to that of the second quarter of 2019. However, growth in currency with the public and saving and time deposits increased during the comparative period of 2020

This reflects a retreat to cash by the general public with COVID 19 accompanied in part by the desire to lock into interest rates at that time out of suspicions that further monetary easing would subsequently take them lower still.

Trends in developments of monetary aggregates were broadly consistent with the trends in inflation. For the period under review  although growth in monetary aggregates showed a downward trend, inflation remained fairly flat during the review period indicating that the factors driving inflation during the review period were largely non-monetary shocks to food prices attributed to increased demand, and supply constraints on account of COVID-19 global supply chain disruptions.

The observed contraction in M2+ was mainly attributed to considerable reduction in Net Foreign Assets (NFA) which was moderated by an increase in Net Domestic Assets (NDA). Growth in NFA decreased significantly from 22.5 percent in the second quarter of 2019 to 6.2 percent at the end of the second quarter of 2020. This was however higher than the growth of negative 8.2 percent recorded during the first quarter of 2020

The slowdown in growth of NFA during the period can be attributed to energy sector payments, debt servicing and balance of payments support. In contrast, Net Domestic Assets (NDA) increased from a growth of 22.0 percent in Q2:2019 to 25.0 percent growth in the second quarter of 2020 compared the growth of 25.4 percent recorded in the first quarter.

In terms of components of NDA, growth in net claims on government and claims on public sector increased from 71.4 percent and 9.3 percent respectively in Q2:2019,to 111.1 percent and 30.5 percent respectively in Q2:2020. This was influenced by increases in government expenditure to contain the impact of COVID-19 disruptions on business activities and economic growth. However, growth in claims on private sector declined from 15.8 percent to 12.7 percent over the same comparative period, influenced by sluggish demand for credit due to uncertainties associated with COVID-19. Growth in Other Items (Net) amounted to139.9 percent in the second quarter of 2019 compared to 215.5 percent in Q2:2020.

facebookShare on Facebook
TwitterTweet
ShareTweetShare

Related Posts

Finance, Risk, and Financial Risk Management: From a Business Manager’s Standpoint

Finance, Risk, and Financial Risk Management: From a Business Manager’s Standpoint

June 27, 2022
MTN Ghana to pay GHS0.085 dividend per share

MTN Ghana extends coverage to 5.3 million Ghanaians in 2021- CEO

June 26, 2022
45% of UK drivers cut vehicle journeys as Fuel Prices Surge

45% of UK drivers cut vehicle journeys as Fuel Prices Surge

June 26, 2022
Bank of Ghana, Cyber Security Authority to deepen Collaboration

Bank of Ghana, Cyber Security Authority to deepen Collaboration

June 26, 2022
African Development Bank Group unveils US$10bn COVID-19 Response Facility

AfDB prepares $28m post COVID-19 programme for Ghana

June 21, 2022
Next Post
Producer Price Inflation for September Rises To 9.6%

Producer Price Inflation for September Rises To 9.6%

Gov’t to conserve 465GWh in next decade with introduction of ECOFRIDGES

Gov’t to conserve 465GWh in next decade with introduction of ECOFRIDGES

Discussion about this post

Archives

<
June 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
▼
>
MonTueWedThuFriSatSun
  12345
6789101112
13141516171819
20212223242526
27282930   
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
    123
45678910
11121314151617
18192021222324
252627282930 
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
 123456
78910111213
14151617181920
21222324252627
28      
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
1234567
891011121314
15161718192021
22232425262728
2930     
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
  12345
6789101112
13141516171819
20212223242526
27282930   
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
   1234
567891011
12131415161718
19202122232425
262728293031 
       
 123456
78910111213
14151617181920
21222324252627
282930    
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
   1234
567891011
12131415161718
19202122232425
2627282930  
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
1234567
891011121314
15161718192021
22232425262728
       
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
      1
2345678
9101112131415
16171819202122
23242526272829
30      
   1234
567891011
12131415161718
19202122232425
262728293031 
       
 123456
78910111213
14151617181920
21222324252627
282930    
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
1234567
891011121314
15161718192021
22232425262728
2930     
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
  12345
6789101112
13141516171819
20212223242526
27282930   
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
     12
3456789
10111213141516
17181920212223
242526272829 
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
    123
45678910
11121314151617
18192021222324
252627282930 
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
      1
2345678
9101112131415
16171819202122
23242526272829
30      
   1234
567891011
12131415161718
19202122232425
262728293031 
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
     12
3456789
10111213141516
17181920212223
24252627282930
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
1234567
891011121314
15161718192021
22232425262728
2930     
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
    123
45678910
11121314151617
18192021222324
25262728   
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
   1234
567891011
12131415161718
19202122232425
2627282930  
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
     12
3456789
10111213141516
17181920212223
24252627282930
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
    123
45678910
11121314151617
18192021222324
252627282930 
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
      1
2345678
9101112131415
16171819202122
23242526272829
30      
   1234
567891011
12131415161718
19202122232425
262728293031 
       

RECOMMENDED

Finance, Risk, and Financial Risk Management: From a Business Manager’s Standpoint

Finance, Risk, and Financial Risk Management: From a Business Manager’s Standpoint

June 27, 2022
MTN Ghana to pay GHS0.085 dividend per share

MTN Ghana extends coverage to 5.3 million Ghanaians in 2021- CEO

June 26, 2022

MOST VIEWED

Plugin Install : Popular Post Widget need JNews - View Counter to be installed
  • Energy
  • Health
  • Auto
  • International
  • Subscription Form
  • Staff Webmail
  • About Us
  • Contact Us
Call us: +233 24 432 0902 | info@goldstreetbusiness.com

© Copyright © 2020 goldstreetbusiness.com. All Rights Reserved.

No Result
View All Result
  • Homepages
    • Homepage Layout 1
    • Homepage Layout 2
  • World
  • Business
  • Technology
  • Health

© Copyright © 2020 goldstreetbusiness.com. All Rights Reserved.

Login to your account below

Forgotten Password?

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.