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| Cut in secondary reserves applauded |
6/23/2005 |
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The private sector is applauding the decision by the central bank to reduce the secondary reserves of the banks from 35 to 15 percent.
The move is expected to free up funds for commercial banks to lend to the private sector thus fuelling growth.
Chief Executive of the Ghana National Chamber of Commerce and Industry Sal Amegavie is hopeful that commercial banks will react positively to the move.
He told Joy business report that the chamber in talks with the banks on matters concerning the spread between the lending and borrowing rates and discussions will be extended to include the reduction in the secondary reserves as well.
The reduction in the secondary reserves will take effect from the 1st of July but bankers say the impact of the policy will not be felt immediately.
They explain that a large chunk of the reserves are in treasury bills which will be redeemed only after they mature.
While applauding the central bank’s move, Managing Director of Ghana Commercial Bank, Lawrence Adu-Mantey, notes that the impact would have been bigger if primary reserves requirement which currently stands at 9 percent had been cut.
This is because while the secondary reserves yield some returns, primary reserves yields nothing for the bank.
Source: Joy FM (Ghana)
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