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More money was found out of the banking system in October this year than in any other month in 2020, according to the latest monetary indicators from the Bank of Ghana.
According to the Central Bank, the currency outside the banks increased by 44% in October this year. This suggests that the money supply showed a significant expansion during the period.
However, from July 2020 to September 2020, the currency outside banks grew 41.4%, 39.3% and 43.7%, respectively.
This, the Central Bank said, reflects the complementary monetary policy and fiscal stimulus measures adopted by the government to support efforts to minimize the impact of the COVID-19 pandemic.
It noted that the increase in total liquidity or money supply was mainly due to its net domestic assets and commercial banks.
While net domestic assets rose sharply in October, net foreign assets plummeted over the same comparative period. The drop in net foreign assets could be attributed to the covid-19 pandemic.
Both demand deposits, generally checking and demand accounts, and savings deposits grew significantly in the first 10 months of this year.
Demand deposits grew 29.4% in October 2020, the highest of the year, while savings and time deposits grew 26%, the second highest growth of the year.
At the same time, foreign currency deposits grew considerably in October, than in any other month this year.
This indicates that more dollars and other foreign currencies were found in the banking system.
Deposits in foreign currency grew by 27.3%, the highest so far in 2020.
Interest rates
Interest rate trends in the money market reflected a mixed performance, as yields on short- and medium-term instruments declined, but generally declined over the long term.
On a year-on-year basis, the rate on 91-day T-bills dropped to around 14.1% in October 2020 from 14.7% a year ago. Similarly, the interest rate on the 182-day instrument was reduced from 15.1% to 14.1%.
