18 March 2020 – Bank of Ghana announce additional measures including removal of transaction charges

Type of Intervention: Advisory, Financial Support, Regulation, Stimulus, Further Measures Released by Bank of Ghana for the financial sector (18th March 2020)
Sectors Involved: Central Bank, Finance/Economy
Intervention Categories: Finance policy and financial aid; Monetary and macro-financial policy
Level of Jurisdiction: National
Lead People/Agency: BANK OF GHANA

Overview: The Bank of Ghana released further COVID 19 response directives on 18th March 2020 for the financial sector. the measures included:

a. a. Reduction of the monetary policy rate by 150 basis points to 14.5 percent as the central bank bids to stimulate the economy and shield the impact of COVID19.

b. Promote the use of Digital money transfer platforms with free charges on mobile money charges on transfers up to GHS100

c. Provisioning for Loans in the “Other Loans Especially Mentioned” (OLEM) category is reduced from 10 percent to 5 percent for all banks and Specialised Deposit-Taking Institutions (SDIs) as a policy response to loans that may experience difficulty in repayments due to slowdown in economic activity. Provisioning norms for loans in all other categories are maintained. This should provide capital relief to banks and SDIs in these uncertain times.

d. Loan repayments that are past due for Microfinance Institutions for up to 30 days shall be considered as “Current” as in the case for all other SDIs. 10. The Bank of Ghana has agreed with banks and mobile money operators on measures to facilitate more efficient payments and promote digital forms of payments for the next three months, subject to review, effective March 20, 2020.

e. Increasing daily thresholds for various mobile money wallets.

Full details here: https://www.bog.gov.gh/wp-content/uploads/2020/03/MPC-Press-Release-March-2020-3.pdf

Other links: 1
Type of Justification: Advice of INTERNAL government advisory committee or group, BoG Monetary Policy Committee
Source of Evidence or Justification: Ghana Health Service, Presidents Message of COVID 19 Response
Evidence/Justification: The impact of COVID 19 on some of the major trading partners of Ghana such as China, USA and UK is causing a sharp downturn of global stock prices and has increased the uncertainty in the global financial Market. This has a repelling effect on Ghana’s economy. Increase in COVID 19 cases in Ghana has resorted in the intensification of public education on social distancing and since the economy of Ghana thrives on the informal sector which predominantly uses physical cash, businesses have taken nose dive.