BoG pegs reference rate at 16.82%

• Posted on April 5, 2018
• by Nana Kwesi Coomson
• Comment

The Central Bank has pegged the Ghana Reference Rate for April 2018 at 16.82 percent.

This was after the Bank of Ghana (BoG), in consultation with the Ghana Association of Bankers, reconstituted a working group to review the existing base rate model and develop a new framework for base rate determination.

This is contained in a statement issued by the Central Bank on its website.

By the foregoing, all commercial banks would now determine their interest rates on their loans every month, with the rate as their reference.

The Central Bank decided to review the previous base rate model which adopted a minimum lending rate for all banks.

The bank also aims to move towards a more market based model of base rate setting in the medium to long term.

The ‘base rate’ emanating from this model is now a reference rate rather than a minimum lending rate for all banks as was the case with the previous model.

“A bank shall price its flexible and fixed term loans by adding or subtracting its risk premium to the Ghana Reference Rate. Flexible or floating term loan for any tenure granted by a bank from the implementation period will reset after each month’s publication of the GRR. Fixed term loan rates granted by a bank in its normal course of business from the implementation date will however run until maturity.”

Businesses have been complaining in recent times due to high interest rates charged by financial institutions.

This has become a huge disincentive for a lot of them, hence the adoption of the new model by the BoG to help maintain businesses and jobs they create.

Unlicensed deposit taking operator

In another development, the Central Bank has warned the general public of the activities of an entity, named Wyselink Microfinance Limited, which engaged in deposit-taking without a licence from the Bank of Ghana.

Wyselink Microfinance Limited was operating with a forged Bank of Ghana licence number 000267 purported to have been issued on 30th October 2013, as well as a Certificate of Incorporation and Certificate to Commence Business, both issued on 20th March, 2009.

The entity has since been closed down and the Bank of Ghana has reported the matter to the Ghana Police Service.

The operators are assisting the Police with investigations.

The offices of Wyselink Microfinance Limited were located in Takoradi, Assin Fosu, Ofankor and Dobro.

The owner of Wyselink Microfinance Limited is Rev. Eric Nhyira Baafi.

Other key officers of the entity are Messrs Isaac Fiifi Morgan, Director; Eugene Amankwah Asante, Operations Manager and Michael Annan, Head of Accounts.

“Wyselink Microfinance Limited is not licensed to engage in microfinance business, so anyone who does business with Wyselink Microfinance Limited does so at his or her own risk and the Bank of Ghana will not be liable for the refund of any deposit lost by a depositor,” it added.

By Samuel Boadi