Business News of Wednesday, 25 January 2017
Ghana’s international reserves situation and exchange rate stability have been boosted by its first Balance of Payment (BoP) surplus recorded in five years, the Bank of Ghana announced Monday.
According to the central bank governor Abdul-Nashiru Issahaku, the country recorded 2.6 billion U.S. dollars in BoP surplus at the end of last year.
“For the first time since 2011, the provisional balance of payments in 2016 recorded a surplus. This was attributed to a narrowing of the current account deficit driven largely by improvement in the trade balance,” Issahaku announced during the 74th Monetary Policy Committee press briefing.
The improvement, which represented 6.2 percent of gross domestic product (GDP), more than compensated for the moderation in the capital and financial accounts arising from lower official foreign inflows.
The country recorded a 2.84 billion-dollar BoP deficit in 2015 or 7.5 percent of GDP but foreign exchange market witnessed some volatilities in the run-up to the December 2016 polls as demand pressures mounted on foreign currency.
“In 2016, the Ghana cedi recorded a cumulative depreciation of 9.6 percent against the U.S. dollar, compared with 15.7 percent in 2015,” the governor said.
Issahaku however warned against underlying global risks that could impact adversely on Ghana’s balance of payments, fiscal operations and the inflation outlook.
“These include a stronger U.S. dollar and rising global bond yields on the back of expected hikes in the Fed funds rate,” he stated.