According to him, banks continue to deploy their resources towards short-term investments as opposed to extension of credit, in response to the increased risks associated with lending following the deteriorating macroeconomic conditions and the impact of the Domestic Debt Exchange Programme (DDEP).
Speaking at the 115th MPC press briefing on November 27, 2023, Dr Addison said private sector credit contracted by 7.5 percent in October 2023, compared with a 57.3 percent growth recorded in October 2022.
“In real terms, credit to the private sector contracted significantly by 31.6 percent relative to a growth of 3.0 percent recorded over the same comparative period,” Dr Addison said.
He continued, “On the money market, interest rates broadly tightened at the short end of the yield curve. The 91-day and 182-day Treasury bill rates fell marginally to 29.40 percent and 31.37 percent respectively, in October 2023, from 31.53 percent and 32.61 percent respectively, in October 2022."
"The rate on the 364-day instrument, however, increased to 33.16 percent from 32.32 percent over the same comparative period,” the BoG Governor added.
Meanwhile, the BoG has kept the policy rate unchanged at 30 percent for the second consecutive time citing core inflation measures easing towards a downward trend.
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