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    [From the left] Thomas Abanga (CEO of Abanga Farms & Food Systems), Selma Ashipala Musavyi (Namibia High Commissioner to Ghana), Dr. Benjamin Sasu (Head of Food Safety), Mrs. Chariti Gbadawo (Director at the Ministry of Foreign Affairs & Regional Integration) ), Prof Bani (Board Chairman, Abanga Farms and Food Systems) and Clarence Zamuee (MEATCO Rep)

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    Gov’t still plans on tabling a legislation to compel banks to lend to the Agric sector – Agric Minister

    Financial transactions will be allowed even without Ghana card from 1st July – GAB assures

    Enterprise Group PLC records 37% rise in revenue in 2021

    Prices of petrol, LPG to fall by 4% in first pricing window of July – IES

    Losses due to fraud in banking sector in 2021 up by 144%; hits GH¢61m – BoG report

    ASTM International pledges support for Ghana’s petroleum industry

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    Financial transactions will be allowed even without Ghana card from 1st July – GAB assures

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    Gov’t to commence talks with IMF for bailout

    Financing agric sector alone not enough to grow it – GIRSAL CEO

    We’re not charging E-levy on merchant accounts – GRA

    Gov’t still plans on tabling a legislation to compel banks to lend to the Agric sector – Agric Minister

    AfCFTA Secretariat calls for accelerated dev’t for key infrastructure in Africa to boost trade

    Financial transactions will be allowed even without Ghana card from 1st July – GAB assures

    Enterprise Group PLC records 37% rise in revenue in 2021

    Prices of petrol, LPG to fall by 4% in first pricing window of July – IES

    Losses due to fraud in banking sector in 2021 up by 144%; hits GH¢61m – BoG report

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    [From the left] Thomas Abanga (CEO of Abanga Farms & Food Systems), Selma Ashipala Musavyi (Namibia High Commissioner to Ghana), Dr. Benjamin Sasu (Head of Food Safety), Mrs. Chariti Gbadawo (Director at the Ministry of Foreign Affairs & Regional Integration) ), Prof Bani (Board Chairman, Abanga Farms and Food Systems) and Clarence Zamuee (MEATCO Rep)

    Ghana’s Abanga Farms & Food Systems and Namibia’s Meatco in big partnership

    Gov’t still plans on tabling a legislation to compel banks to lend to the Agric sector – Agric Minister

    Financial transactions will be allowed even without Ghana card from 1st July – GAB assures

    Enterprise Group PLC records 37% rise in revenue in 2021

    Prices of petrol, LPG to fall by 4% in first pricing window of July – IES

    Losses due to fraud in banking sector in 2021 up by 144%; hits GH¢61m – BoG report

    ASTM International pledges support for Ghana’s petroleum industry

    NIB MD laments cost of borrowing for private sector

    Finance professionals urged to develop strategies to boost ESG-driven business environment

  • TECHNOLOGY

    Financial transactions will be allowed even without Ghana card from 1st July – GAB assures

    Losses due to fraud in banking sector in 2021 up by 144%; hits GH¢61m – BoG report

    BoG, CSA deepen collaboration to fight cyber threats

    Dr. Bawumia unveils Ghana’s first Tier IV data centre

    ADB pioneers in global remittance services in Ghana [ARTICLE]

    Introduction of GhanaPay complements efforts to capture the unbanked into digital payments ecosystem – Veep

    #CitiBusinessFestival: How the country can take advantage of the “Ghana Opportunity”

    Chamber of Telecommunications calls for more investment into Technology to improve livelihoods

    Citi Business Festival: Address lack of financial data challenges using MoMo – Rufai Abdul Majeed

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    Gulf central banks, Bank of England raise policy rates after Fed hike

    US Fed meets inflation surge with 75bp hike

    As Nigeria’s inflation rate accelerates to 17.71%, the World Bank warns millions could face extreme poverty

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    Ticket prices to rise following B.A schedule change on Accra-London-Accra route

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Kenya:IMF says rates capping could erode Central Bank autonomy

bycitibusinessnews
September 15, 2016
in Africa, East Africa
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Control of interest rates may compromise the independence of the Central Bank of Kenya (CBK) since it will set the base rate with consideration of public or political interests, the International Monetary Fund (IMF) has said.

The multilateral lender said it feared the CBK’s decisions on monetary policy have been captured by politics through the control of the price of money.
The CBK makes decision on the Central Bank Rate (CBR) through its independent organ Monetary Policy Committee (MPC), which normally meets every two months.

With the CBR now declared the base (lowest) rate for lending rates, the MPC will be meeting knowing the rate they set will be much more closely followed because of implications on actual price of loans.

“Linking deposit and lending rates to the central bank’s policy rate may compromise the independence of the central bank, and hamper its ability to enact monetary policy towards achieving its main objectives — that is to maintain price and financial stability and to support the economy,” said IMF deputy managing director Mitsuhiro Furusawa.

Mr Furusawa made the remarks at the CBK symposium called in Nairobi on Tuesday to discuss the place of central banking in Kenya in the past 50 years.

The meeting is among the activities the CBK has lined up as part of celebrating its 50-year history.

The IMF deputy MD said politicisation of monetary policy may lead to risks in the financial system and credit access since some borrowers would be highly underpriced at the current 14.5 per cent maximum lending rate.

Locking out many borrowers

“The politicisation of monetary policy bears well-known risks — for the soundness of the financial system and for credit access, notably higher-risk borrowers,” said Mr Furusawa.

The IMF fears that the control of interest rates could end up locking out many borrowers, especially those perceived to be high-risk such as small and medium enterprises, farmers and consumers.

“International experience suggests that, in many cases, interest rate controls may actually end up reducing access to the banking system for small borrowers — such as farmers, SMEs and consumers — and may also revive informal lending at much higher cost for borrowers,” said Mr Furusawa.

The IMF was concerned about the extent to which the credibility of the monetary policy — especially the achievement of inflation targets — may be compromised by a lack of independence.

However, Mr Furusawa said Kenya had done well in relation to being prepared for shocks by keeping its forex reserves at a high level — currently above five months of import cover — and also ensuring inflation was at most times within the target of 2.5-7.5 per cent.

“The good news is that many of sub-Saharan Africa’s central banks have built adequate international reserve cushions. This includes Kenya, giving the CBK greater room for manoeuvre, and reducing the risk of a sudden reversal of capital flows in the first place,” said the CBK governor’s former workmate.
girungu@ke.nationmedia.com

 –
Credit: Business Daily
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