…while BoG’s monetary policy rate stayed unchanged at 17%
The Governor of the Bank of Ghana (BoG), Dr. Ernest Addison has indicated that the quality of loans in the industry witnessed an improvement, as the Non-Performing Loans (NPLs) ratio eased to 21.3 percent in August 2018 from 21.9 percent for the corresponding period in 2017.
Dr. Addison disclosed this at the 84TH Monetary Policy Committee briefing in Accra on Monday.
In this light, Dr. Addison noted that the Bank has also approved a loan write-off of GHS 1.2 billion for the banking industry, which has reduced the NPLs ratio significantly to 18.4 percent.
According to the Governor, these category of NPLs are completely lost, adding that, “once you have NPLs that are completely lost, you have to make full provisions for them. So, over the years, the banks have fully provided for these lost components.”
He noted that, the action was taken in order to bring down the NPLs in the banking industry.
The previous Central Bank report, published in May noted that, the stock of NPLs increased from GHS 7.1bn as at end-April 2017 to GHS 8.63bn in April 2018- a new record high.
The Monetary Policy Committee of the Central Bank kept its key lending rates to commercial banks unchanged at 17 percent for the second time this year.
He indicated that this was due to threats envisaged to economic growth and inflation.
In explaining, Dr. Addison said, “the most recent forecasts show some marginal elevation of the disinflation path considering the possible second round effects of the recent increases in petroleum prices, exchange rate depreciation, effects of recent increases in taxes, pick up in global inflation as well as the effects of the tight global financing conditions.”
By Joshua W. Amlanu