Despite a huge oil tag on the external account of about one billion ($1m), Ghana would still be able to generate a balance of payment surplus of about $155 million in 2005.

Balance of payment is a summary of the international transactions of a country over a period of time including commodity and service transactions, and gold movements.

The country is projected to gain a balance of payment surplus of $155 million this year because the economy is doing well, with most of her imports being capital goods.

This projection was made in reference to the huge net flow of remittances, which is sufficient to reduce deficit on the current account balance to about $200m.

These were revealed to the press on Monday in Accra, after the Monetary Policy Committee had announced the retention of the Prime Rate at 15.5%.

Dr. Paul Acquah, the chairman of the committee said, "This means that we have an economy that is growing and therefore most of our imports are capital goods. Therefore, imports are rising to meet the demand of growth and consumption in the economy."

He said in the course of the year (2005), Ghana had received a huge chunk of permanent debt relief and therefore the burden on the servicing of our external debt has been reduced drastically.

On the compliance of banks in the new capital adequacy ratio of ?70 billion, he said most banks have complied, except some small ones, which are also moving towards compliance.

He disclosed that commercial banks in Ghana have been given up to the end of next year to comply with the new capital adequacy ratio of ?70 billion.

"Looking at the growth in resources, some would reach there without resorting to floatation on the capital market or raising foreign capital."

He however said that although the expiry date has not passed, the Bank of Ghana (BoG) is still monitoring them for a smooth transition.

Speaking on the issue of fraud in the banking industry and the fear that Nigerian banks are fraudulent, the governor said fraudulent activities popularly called '419' is not restricted to Nigeria alone, but world wide.

He said all Nigerian Banks licensed to operate, have very strong reputation and the BoG is not aware that any of them has participated or created an opportunity for 419 to be perpetrated.

He testified that all the Nigerian banks have come with up-to-date systems and technologies, leading to competition into the Ghanaian banking industry.

"That is good for the banking system. We expect a positive contribution from the banks towards the industry's development," he intimated.

Dr. Acquah said more banks were allowed into the industry because they expect the system to be contestable, efficient and one that is global oriented.

He was happy that the Ghanaian banking industry has diverse traditions with banks from Europe, Africa and Asia.

"We would regulate the banking industry strictly with integrity and any bank must play by the rules of the central bank," he added.

On the issue of high interest rates, the governor said with the spread between the lending rates, the inflation rate, borrowing rate and prime rate all moving downwards, lending rates should have come down.

"It must also move downward as inflation expectation diminishes." He however said the adjustment from particular interest rate levels to a lower interest levels involves a shifts in portfolios and the degree in the shift in portfolios depends on the nature of investments or the assets banks are holding and the time frame within which to readjust the portfolios.

"If you look at the empirical history of disinflation and the movement in interest rates, you would discover that it begins with initially high interest rate spreads and the spreads would continue to diminish over time."

He said banks are increasing the amount of credit to the private sector.

Dr. Acquah said banks are re-deploring their resources to ensure that their profit growths are sustained in order to maintain the viability of the banking system.

"They are going through a transitional phase," he observed.

He said the transfer of resources from government instruments into credit for the private sector should be done in an orderly manner. "That is what we are waiting for," he added.