Bank of Ghana Unleashes Lending Caps After EXIM Deal

Following successful sovereign debt restructurings, nations often struggle to pass macro-economic savings down to the private sector. Commercial banks usually protect their margins rather than passing on the benefits of lowered central bank policy rates, choking small and medium enterprises (SMEs) out of the recovery boom.

Following last week's historic EXIM India debt deal, the Bank of Ghana has issued an unprecedented, aggressive directive placing strict caps on commercial lending margins. The BoG is forcing banks to pass the recent policy rate cuts directly to consumers and businesses. This is a massive intervention designed to forcibly inject liquidity into Ghana's struggling private sector, which has been starved of affordable credit for over three years.