BANK OF GHANA NEWS BRIEF News Summaries from Foreign and Local Media

Monday, June 21, 2021

ECB extends capital relief for largest Demand for Fed’s reverse repo hits new Eurozone banks record The European Central Bank extended capital The New York Fed accepted a record relief measures for the major Eurozone banks $755.8bn through its overnight reverse it supervises for nine months. The European repurchase window on June 17. The increase Central Bank is allowing banks to continue followed the Federal Open Market excluding exposures from holdings of central Committee’s decision, on June 16, to raise the bank assets from the leverage ratio it imposes interest rate offered on reverse repo deposits on the Eurozone’s biggest lenders. by 5 basis points, to 0.05%. The June 17 figure (www.centralbanking.com 18/06/21) marked a 45% increase over the $521bn absorbed the previous day. At its June 15 and BoE suspends dividend as capital falls 16 meeting, the Federal Open Market below target Committee decided to keep its policy rate The Bank of England will not be paying a steady at 0–0.25%. dividend to the government this year, as its (www.centralbanking.com 18/06/21) loss-absorbing capital dipped below the minimum level agreed with the UK Treasury. Bank of Canada to break sequence of lower The BoE did make a pre-tax profit of £72m terminal rates as governments splurge ($100m) in the 2020–21 financial year, With fiscal spending booming and households according to its annual report and accounts flush with cash, investors are betting that the published on June 17. Bank of Canada’s next tightening cycle, (www.centralbanking.com 18/06/21) expected to begin in 2022, will result in interest rates climbing above the previous peak Bank of England set to stay split on QE for the first time in decades. In four major after inflation jump tightening cycles since the early 1990s, the Britain's top central bank officials look set to Bank of Canada’s key interest rate has peaked remain divided this week over whether to pull at a level that was lower than the preceding the plug on their £875bn ($1.2tr) government endpoint. (www.reuters.com 20/06/21) bond purchase programme, after inflation hit its highest in nearly two years. ‘Contagious zombies’ menace German (www.reuters.com 21/06/21) economy – Bundesbank paper

The US economy is never going back to Unconventional lending by the European 'normal' Central Bank has increased credit supply to The US economy has come a long way since “non-viable” firms in Germany, a working last year's devastating downturn. But a return paper published by the Deutsche Bundesbank to "normal" may not be possible. The Back-to- finds. In Contagious zombies, Christian Normal Index created by CNN Business and Bittner, Falko Fecht and Co-Pierre Georg Moody's Analytics stands at 93% as of June investigate the effect of unconventional 18, a new pandemic-era high. The index is monetary policy on banks’ lending to non- comprised of 37 national and seven state-level financial firms. They examine whether it indicators that track metrics such as consumer incentivises banks to expand their credit to credit, unemployment claims, job postings, otherwise non-viable firms, a practice widely domestic air travel and hotel occupancy. known as “zombie lending”. (www.edition.cnn.com 20/06/21) (www.centralbanking.com 16/06/21)

CURRENCY BUYING SELLING

+USD/GBP 1.3814 (1.3924) 1. 3815 ( 1.3925 )

+USD/EUR 1.1866 (1.1910) 1. 1867 ( 1.1911 )

*GHS/USD 5.7483 (5.7483) 5.7 54 1 ( 5.7541 ) *GHS/GBP 7.9407 (8.0040) 7 . 9493 ( 8.0126 ) *GHS/EUR 6.8208 (6.8468) 6 . 8275 (6.8536)

+SOURCE: BOG INTERNAL TRANSACTION RATES: 21/06/21 (Rates for 18/06/21 in brackets) * BOG INTERNAL TRANSACTION RATES: 21/06/21 (Rates for 18/06/21 in brackets)

Vol.: 25 No: 1 Date: 21/06/21

China keeps lending benchmark rate European shares slide as Fed's hawkish tone unchanged for 14th straight month hits miners, bank stocks China kept its benchmark lending rate for European shares fell on Monday as mining and corporate and household loans unchanged for bank stocks bore the brunt of a surprise shift in the 14th straight month at its June fixing on the US Federal Reserve’s stance on monetary Monday, in line with market expectations. The policy last week. The pan-European STOXX one-year loan prime rate (LPR) was kept at 600 index was down 0.6% at a more-than-two- 3.85%. The five-year LPR remained at 4.65%. week low by 0704 GMT. The index snapped a (www.reuters.com 21/06/21) four-week winning streak after the Fed signalled it could raise interest rates much China deposit rate reform to have limited sooner than expected. (www.reuters.com 21/06/21) impact - Industry body China’s reforms to the way banks calculate Single inflation rate, 4% fiscal deficit key deposit rates will have only a limited impact qualifications for currency usage by on financial institutions and depositors, and ECOWAS members banks do not need to sharply adjust deposit An end of year single inflation rate and fiscal rates, an industry body overseeing rates said deficit of 4% of GDP has been set as key on Monday. The body said the previous requirements for the qualification of practice of multiplying the benchmark rate ECOWAS member countries in the usage of helped push up long-term rates and led to the Eco currency. This is according to competition among banks to lure deposits by President of the ECOWAS Commission, Jean raising rates or unveiling innovative products. Claude Kassi Brou. Making the disclosure at (www.reuters.com 21/06/21) the 59th Ordinary Session of ECOWAS, President Jean Claude Kassi Brou stated the China's loan prime rates remain unchanged aforementioned requirements form part of ten China's one-year loan prime rate (LPR), a (10) convergence qualification criteria for all market-based benchmark lending rate, came in ECOWAS members. at 3.85% Monday, unchanged from the (www.norvanreports.com 21/06/21) previous month. The over-five-year LPR, on which many lenders base their mortgage rates, Uganda’s central bank cuts rates to historic also remained unchanged from the previous lows reading of 4.65 %, according to the National The Bank of Uganda’s monetary policy Interbank Funding Center. committee cut the policy rate by 50 basis (www.xinhuanet.com 21/06/21) points, on the back of uncertainties around growth and inflation. The central bank rate is Chinese Yuan weakens to 6.4546 against now at 6.5%, the lowest it has been since the USD Monday central bank’s current monetary policy The central parity rate of the Chinese currency framework was introduced in 2011. renminbi, or the Yuan, weakened 185 pips to (www.centralbanking.com 18/06/21) 6.4546 against the US dollar Monday, according to the China Foreign Exchange Congo central bank lowers policy rate 200bp Trade System. In China's spot foreign The Monetary Policy Committee of the exchange market, the Yuan is allowed to rise Central Bank of Congo (BCC) reduced its or fall by 2% from the central parity rate each policy rate by 200 basis points to 8.5% on June trading day. The central parity rate of the 17, marking the third time that the Democratic Yuan against the US dollar is based on a Republic of Congo’s central bank has cut rates weighted average of prices offered by market this year. The BCC raised interest rates by a makers before the opening of the interbank sweeping 1,100bp, to 18.5%, in Aug. 2020 market each business day. after a spike in inflation. (www.xinhuanet.com 21/06/21) (www.centralbanking.com 18/06/21)

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