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Increased foreign currency deposits contributed to cedi’s depreciation – BoG report

A latest banking sector report has shown that the increased deposits of foreign currency partly contributed to the depreciation of the cedi recorded within the first four months of 2019.

According to the banking sector report spanning activities between January to April 2019, foreign currency that were deposited at banks increased by 28.2 percent in April this year compared to the same period last year.

The central bank’s report indicated that the equivalent of the figure in cedi terms, increased from 15.1 billion cedis to 19.3 billion cedis within the one year period.

Similarly, domestic deposits with banks also went up for the period under review.

Domestic deposits which comprise the largest component of total deposits, recorded a yearly growth of 19.7 percent to GH¢72.7 billion compared to 15.7 percent growth a year ago.

Meanwhile, the banking sector report indicated that the industry’s capital base remains strong on account of the recently completed recapitalization exercise.

Paid-up capital grew strongly by 70.5 percent, from GH¢5.2 billion to GH¢8.90 billion, while total shareholders’ funds (paid-up capital and reserves) increased by 12.9 percent to GH¢15.5 billion in April 2019.

Again, the report by the central bank noted that gross loans and advances (excluding loans under receivership) reached GH¢37.82 billion in April 2019, representing a nominal growth of 2.8 percent compared to 2.0 percent in April 2018.

Moreover, the industry’s asset quality improved significantly during the period under review.

This is because the stock of the industry’s Non-Performing Loans (NPLs) declined from GH¢8.63 billion in April 2018 to GH¢7.16 billion in April 2019, representing a contraction of 17.0 percent compared with the 20.8 percent growth recorded a year earlier.

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