The Bank of Ghana is keeping its interest rate unchanged at 14.5%. This comes after it concluded a $1 billion repo facility with the U.S. Federal Reserve to boost the country’s foreign exchange.
A repurchase agreement (repo) is a short-term borrowing for dealers in government securities.
According to the Bank, Ghana’s economy will grow despite the COVID-19 pandemic to 2% or 2.5 %. The Bank’s governor, Ernest Addison forecast GDP growth of 6.8% in 2020 from 3.45 N 2019.
However, in Q1, the widening budget deficit of 1.04% occurred due to a reduction in revenue. Addison adds that the shortfall in oil price and other tax revenues due to global movement restriction had left the country with a large financing gap.
The bank had triggered an emergency financing provision allowing it to increase purchases of government securities, he said, and it had purchased 5.5 billion Cedis or $958 million of the government’s COVID-19 relief bond.
He said the bank stood ready to continue the assets purchase programme of up to 10 billion Cedis.