Interest rates remain stable

Interest rates in the country are expected to remain stable for the next couple of months in the wake of the Monetary Policy Committee decision to maintain the policy rate at 15 percent.
The policy rate is the rate at which banks borrow from the Central Bank as a last resort and also serves as a benchmark for the various banks in setting their respective base lending rates.
It is also used for controlling inflation, determining day-to-day liquidity operations, and for determining other market rates such as Treasury Bills.

According to the acting governor of the Central Bank, Dr Henry Kofi Wampah, Interest rate trends have stabilized between July and September 2012. During this period, rates on 91-day treasury bills rose to 23.1 percent from 22.8 percent, while 182-day bills rates remained at 22.9 percent. The 1-year fixed note increased from 22 percent to 22.5 percent. The 2-year fixed note stayed put at 23 percent.
Also the 3-year fixed note was stable at 24 percent, while 5-year bonds declined to 23 percent from 26 percent.
The interbank weighted average rate increased to 17.8 percent in September from 17.2 percent in July 2012.
The average 3-month deposit rate moved up to 11.95 percent in September from 10 percent in July 2012, while average lending rates edged up slightly to 25.7 percent from 24.7 percent recorded in July 2012. On a year to date basis, therefore, the lending deposit spread narrowed to 13.8 percent in September, from 14.7 percent in July 2012.
Banks’ base rate quotations ranged between 12.7 percent and 26.5 percent in October 2012. On the average, base rates inched up to 21.8 percent in October, from 21.1 percent in July 2012.