Business News of Friday, 21 July 2017
Commercial banks in Ghana have defended their high interest rates even in the face of declining Treasury bills.
They argue that T-Bills only account for a slight percentage of the indicators.
“Treasury bills alone are not the factor. Banks have a way of computing their cost of funding and there are various parameters that go into that cost of funding, it is not only Treasury bills” Managing Director of Premium Bank, Kwasi Tumi said.
Treasury Bills have been dropping significantly.
The 91-day bill, for example, is now at 12 percent after starting 2016 at 22 percent.
But in an interview with Citi Business News, Mr. Kwasi Tumi said the impact of other determining factors have contributed to the prevailing interest rates on the market.
“It is a market and the market determines why rates drop or why rates go up. So if Treasury Bills are dropping and bank rates are not dropping then there is something in the markets that is holding those rates up. So if those other factors are not dropping, then obviously they cannot just drop” he emphasized.
He was however optimistic that the rates will drop marginally soon.
“That is the fact but overtime, one would expect that the rates will come down,” he added.
He spoke to Citi Business News at the bank’s meeting with winners of the Premium Bank Ghana Startup Awards 2017.
The bank, as part of supporting SMEs, has set up a 5 million Ghana cedis Integrated Credit Facility Fund also called a help station where SMEs can borrow funds at cheaper rates.