Governor of the Bank of Ghana, Dr. Ernest Addison, has emphasized that the Central Bank can effectively fulfill its role as the government's lender without requiring positive equity.He noted that despite the impairment losses reported in the financial year 2022, the Central Bank maintains sufficient buffers to offer the necessary liquidity support to banks.

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Speaking during a press briefing at the 114th Monetary Policy Committee (MPC) session in Accra on September 25, 2023, Dr. Addison highlighted that the Central Bank maintains a robust buffer position, even though it reported negative equity in 2022.“Yes, the BoG can assist as the lender of last resort,” the BoG Governor said.

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He also stated that commercial banks maintain 12% of their deposits with the central bank as liquidity, implying that the BoG has resources to fall back on if any of them require assistance.“The central bank can operate effectively even in the presence of negative equity, we don’t need positive equity to be effective and we don’t have to print money to do that,” Dr Addison explained.

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However, he highlighted that no bank has approached the central bank for liquidity assistance yet. Nevertheless, he emphasized that the Bank of Ghana (BoG) stands prepared to provide the necessary liquidity support to banks in accordance with the established guidelines.Meanwhile, the interbank weighted average lending rate among banks increased to 26.59 percent in August 2023, up from 21.

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93 percent in August 2022, aligning with the rises in the monetary policy rate.As a result, the average lending rates offered by banks rose to 31.78 percent in August 2023, compared to the 27.96 percent recorded in August 2022.The banking sector, according to the BoG, has maintained its stability, with the industry's total assets increasing to GH¢244.7 billion in August 2023, up from GH¢204.6 billion in August 2022.

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Additionally, this growth in bank assets was primarily funded by a substantial 38.9 percent increase in deposits, rising from GH¢136.7 billion in the corresponding period.However, total borrowings by banks contracted by 41.0 percent, decreasing to GH¢13.9 billion in August 2023 from GH¢23.5 billion in the previous year.

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