Ghana’s central financial institution has outlined aid measures for banks taking part within the authorities’s home debt swap in a bid to ease their issues in regards to the potential influence.
In a letter seen by Reuters on Friday, the West African nation, which goes by means of its worst financial disaster in a era, launched a plan on Monday to swap its native bonds for brand new ones.
The swap would include new maturity dates and coupon charges to revive macroeconomic stability.
Nonetheless, some teams representing monetary establishments holding Ghana’s debt have expressed concern that the restructuring introduced by the finance ministry is not going to succeed.
The aid measures within the central financial institution’s letter embrace decreasing the required money reserve ratio to 12 % on cedi deposits, and threat weights for brand new bonds to be zero % for calculating the capital adequacy ratio and 100% for outdated ones. bonds.
A letter dated December 8 signed by Osei Gyasi, head of banking supervision on the central financial institution, stated “the Financial institution of Ghana encourages all banks to totally take part within the debt swap.”
The West African producer of gold, cocoa and oil goals to cut back its debt-to-GDP ratio from 100% to 55 % by 2027 because it struggles to pay curiosity that the finance minister stated had jumped to between 70 % and 100% % of earnings.
Different measures outlined within the central financial institution’s letter to banks embrace decreasing the capital conservation reserve from three % to zero %, which it stated would “successfully” cut back the CAR from 13 % to 10 %.
It additionally stated it expects banks to droop dividend funds and different funds to shareholders.
Banks can entry the monetary stability fund, whose goal quantity is $1.2 billion to be raised from the World Financial institution and different worldwide monetary establishments, “as a final resort to guard liquidity.”
An Worldwide Financial Fund workforce is visiting Ghana till Tuesday as the federal government seems to barter an assist bundle.
The fund has not but commented on the change of home debt.
(Reuters/NAN)