Ghanaians Abroad Sent $1.4 Billion Home

Private remittances through the banks from Ghanaians abroad last year hit 1.4 billion dollars, sending signals that confidence in and acceptance of the banking system is fast gaining ground.

Briefing journalists in Accra, the Central Bank Governor, Dr Paul Acquah said this represents a major source of foreign exchange in the economy and confidence in banking in Ghana. He was speaking at the Monetary Policy Committee (MPC) briefing, which announced an increase in the Prime Rate to 25.5 per cent from 24.5 per cent. Dr Acquah said it is the first time that a comprehensive record on private inward remittance had been established.

The Prime Rate is the rate at which the commercial banks borrow from the Central Bank. It also determines the interest rates at which the commercial banks lend money to their clients.

Dr Acquah said purchases on the inter-bank foreign exchange market by deposit money banks and forex bureau for the year amounted to some 965 million dollars while forex sales totalled some 960 million. He said "This represents a significant increase over 2001 levels of about 700 million dollars". He added that "preliminary estimates also suggest that recorded exports have increased from 1,867 million dollars in 2001 to 1,992 million last year." Imports on the other hand are estimated to have declined from 2,830 million dollars in 2001 to 2,750 million dollars in 2002.

Dr Acquah said these developments have contributed to a reduction of the external current account deficit and accumulation of reserves. He noted that the Gross International Reserve position of the country improved from 488.8 million dollars by the end of October 2002, to 600 million at the end of December 2002.

Gross reserves in months of imports increased from a low of one month in April 2002 to two-and-a-half months by December 2002. Market interest rates have continued to be within a narrow range with the benchmark 91-day Treasury Bill rate increasing from 26.09 per cent in October 2002 to 26.62 per cent by December 2002.Commercial bank rates have remained within a range of 26 and 29 per cent.