A Banking Consultant, Dr. Richmond Atuahene has detailed some repercussions of hoarding huge sums of money and its impact on the domestic economy.

According to him, the practice does not exactly help the calculation of the money supply in the country.

“In Ghana, we have M1 and M2 which is all about the aggregation of money so far in the economy.

“If somebody is holding such a quantum of money, it means all the figures we have been churning out in the M1 supply and M2 supply are not complete, so it makes it very difficult,” he was quoted by 3news.com.

M1 money supply deals with coins and notes that are in circulation in the country whiles M2 on the other hand is focused on cash deposits and other forms of deposits.

Not only does hoarding cash affect the calculation of money supply but Dr Atuahene noted that this also affects lending to the private sector.

“It also deprives the banks. when we take deposits, we then churn them into investments and be lending to the private sector so we move the money from the surplus area to the deficit area to support the private sector in the growth of the economy.

“So seriously, somebody hiding this money, it means that the economy is being deprived of money to be used in loanable funds to the private sector,” he said.

SSD/MA

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