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Credit to private sector comes under pressure – BoG Governor

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Mon, 24 Jul 2023 Source:

Governor of the Bank of Ghana, Dr Ernest Addison, has said credit to the players in the private sector has been under some pressure in the first half of the year.

He explained that this is based on tighter lending conditions, banks’ impaired balance sheets, and elevated credit risk. He observed a slowdown in credit demand due to the lingering effects of the macroeconomic downturn recorded in 2022.

Despite the development, the Governor said the half-year performance of banks this year has shown considerable profit growth, following significant losses posted in 2022 on account of government's Domestic Debt Exchange Programme.

“If this trend continues, we expect banks to rebuild capital buffers quickly in addition to equity capital injections by shareholders to boost real sector growth and build the resilience of the banking sector”.

“Early operationalisation of the Ghana Financial Stability Fund should also help provide additional recapitalisation support for eligible banks in line with the criteria and governance framework agreed with the IMF and the World Bank.”

Dr Ernest Addison said this when he addressed journalists at the 113th MPC press briefing held in Accra on July 24, 2023.


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