Section I: World Economic Outlook

4.1.1 Global GDP growth

Since the July 2011 MPC meeting, optimism about the outlook for the global economy has deteriorated, with the slide having accelerated in recent weeks fuelled by the 05 August downgrade of the U.S. sovereign rating by Standard and Poors and worsening euro zone debt crisis.

Revised data show that GDP growth across most of the worlds strongest economies slowed over the second quarter of 2011 (2011:Q2).

Private

sector

forecasters

continued

to

reduce their global growth forecasts. Institute of International Finance (IIF) now estimates that global growth will be 3.5 percent in 2011, down from 4.4 percent in 2010. However, a modest acceleration to 3.9 percent in 2012 is expected.

In the United States, unfolding events in the run-up to lifting the US debt ceiling negatively impacted the financial markets and substantially eroded business and consumer confidence.

Europe's past rate hikes, the sovereign crisis and the fiscal policy tightening were taking a toll on growth.

In the emerging market economies, the main factor has been a tightening in monetary conditions, which has resulted from a combination of higher short-term interest rates, increases in bank reserve requirements and an appreciation in the real exchange rate.

Outlook:
Looking ahead, there are some offsetting positives. Disruptions to the global industrial cycle resulting from the disaster in Japan have now largely passed through the system, leaving global Industrial Production well placed to rebound somewhat in the third quarter. Capital spending has been strong in the U.S., and recent orders data point to continued vigour. Lower oil and other commodity prices and declines in bond yields are expected to provide some support to a fragile US and world economy.

4.1.2 Global inflation

Global inflation is likely to subside through 2011:H2, after steadily increasing in 2011:H1. The most obvious reason to expect a dip in global headline inflation in coming months is that oil price inflation is poised to roll over decisively in the months ahead.

The Brent oil spot price which averaged $77 per barrel (pb) in 2010:Q3, peaked at $125pb at the end of April 2011 and has since fallen to about $101 pb (26 August). Heading into 2012, therefore, it seems highly likely that oil prices will be falling on a year ago basis, which would be consistent with global headline inflation dropping to 2 percent or below.

In the emerging market economies, rising core inflation has been a threat, and there seems little reason for this threat to diminish significantly in the months and quarters

Monetary Policy Report Vol. 4 No. 4/2011 Page 2

ahead, especially given that the current slowdown in growth in emerging economies is not expected to be significant or persistent. Moreover, with monetary policy expected to remain expansionary, , the dip in both energy and food prices will lead to a moderation in emerging market headline inflation in coming months.

4.1.3

Global financial stability

Following a week (01-05 August) of twin shocks of a US sovereign debt downgrade and the spread of euro zone turmoil to the much larger Spanish and Italian economies, G7 leaders signalled their willingness to take measures necessary to stem global financial instability. This, together with the decision by the ECB to intervene directly in the Spanish and Italian sovereign debt markets, brought a measure of calm to financial markets, though underlying concerns remained.

4.2

Survey of Monetary Policy Stance of Selected Central Banks

Year to date, the already easy stance to global monetary policy has become even easier. In terms of interest rates, emerging economies have lifted nominal short-term rates but this has not matched the acceleration in inflation, leaving real interest rates below zero.

Interest Rate Decisions by Economy Groups

Ease 1
4 2

The period since July MPC saw fortyeight (48) interest rate decisions from

D e c is io n s

Stay Put Tighten 2 0

27

Monetary Policy Report Vol. 4 No. 4/2011 Page 3

5 10 15 20 25 30 35 40
Number

AEs

EM&DEs

SSA

central banks around the world. Of those decisions, eight (8) hiked the policy rates while six (6) reviewed rates downward with the thirty-four (34) majority staying put. Switzerland adjusted its interest rate target range downward to halt gains in the Swiss franc.

Other than interest rates, Taiwan's central bank increased commercial bank minimum liquidity requirements as part of an ongoing program to strengthen risk management in the banking system. The Philippines raised its required reserve ratio by 100 basis points to 21 percent, and Turkey dropped its required reserve ratios by 100-200bps to add extra liquidity to the market.

The Bank of Japan announced a 10 trillion yen expansion of its asset purchase (quantitative easing) programme. Japan was also reported as intervening in the foreign exchange market to weaken the Yen. Similarly, the European Central Bank recommenced its bond buying program in efforts to stabilize financial markets. The People's Bank of China announced a ban on foreign Yuan loans for purposes other than import/export.

Monetary policy was rocked by the turmoil in global sentiment in the wake of the US sovereign credit rating downgrade, and heightened concerns about contagion in the European sovereign debt crisis.

The Fed has since committed to keeping its target federal funds rate within 0 to 0.25 percent at least through mid-2013 and to continue reinvesting principal payments from its existing security holdings. The Fed first cut rates to near-zero in late 2008, and their maintenance at this level for almost five years would be unprecedented.

The ECB has accelerated its purchases of sovereign debt, especially that of fiscally challenged member nations.

Monetary Policy Report Vol. 4 No. 4/2011 Page 4

Global policy rates

End-2004 End-2005 End-2006 End-2007 End-2008 End-2009 End-2010 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 G7 AVG 2.30 2.85 3.65 3.70 1.31 0.42 0.57 0.57 " " 0.62 " " 0.67 " FED 2.25 4.25 5.25 4.25 1.00 0.25 0.25 0.25 " " " " " " " BOJ 0.00 0.00 0.25 0.50 0.10 0.10 0.0 - 0.1 0.0 - 0.1 " " " " " " " ECB 2.00 2.25 3.50 4.00 2.50 1.00 1.00 1.00 " " 1.25 " " 1.50 " BOE 4.75 4.50 5.00 5.50 2.00 0.50 0.50 0.50 " " " " " " " BOC 2.50 3.25 4.25 4.25 1.50 0.25 1.00 1.00 " " " " " " " SARB 7.50 7.00 9.00 11.00 11.50 7.00 5.50 5.50 " " " " " CBT 18.00 13.50 17.50 15.75 15.00 6.50 6.50 6.25 " " " " " " 5.75 CBC 2.25 4.50 5.25 6.00 8.25 0.50 3.25 3.25 3.50 4.00 4.50 5.00 5.25 " " BOG 18.50 15.50 12.50 13.50 17.00 18.00 13.50 13.50 " " " 13.00 " 12.50 "

FED - US Federal Reserve; BOJ - Bank of Japan; ECB - European Central Bank; CBC - Central Bank of Chile BOE - Bank of England; BOC - Bank of Canada; SARB - South African Reserve Bank CBT - Central Bank of Turkey; BOG - Bank of Ghana

4.3

Commodities markets
commodity prices, and many

There has been a recent correction in international against commodities in recent months, due to: higher interest rates in emerging markets

commodities have entered Q3 with price falls. Macro and liquidity situations have moved

slower growth in advanced economies, especially US, and the end of QE2

With the huge inflows over the last 3 years at risk of reversing, commodities could be under bearish pressure for some time.

OVERVIEW OF THE COMMODITIES MARKET Mkt Close Change (%) Commodity Unit (26 Aug) m/m Crude Oil Brent (nr future) USD/bbl 110.33 -6.3 Ytd 17.0 y/y 46.8 2008 a 98.59 2009 a 0.00 2010 a 80.40 2011:Q1 2011:Q2 2011:Q3 2011:Q4 a a f f 104.46 116.83 115.00 110.00 Period Average

Precious metals Gold (spot) USD/oz

1,790.00

11.5

29.3

45.8

872.90

0.00

1,226.50 1,385.81 1,503.09 1,525.00 1,550.00

Softs Cocoa (CSCE)

USD/tonne

3,044

-1.3

0.7

11.4

2,635

2,799

3,279

3,024

3,300

3,500

4.3.1 Oil
Crude oil prices have tumbled alongside equity markets as risk appetite faltered in the face
150 130 110 $ per bbl.

Developments in the price of Brent crude: (Jan-Dec 2010 & Jan-Aug 2011) Jan-Aug' 11

of the US sovereign rating downgrade, continued euro-area debt concerns and weak economic data. The average weekly price per barrel of the benchmark Brent crude closed August (26th) 2011 at $110.33 per barrel, having risen by 17 percent from the end-2010 price of $94.28

90 70

Jan-Dec'10
50 30 30-05 06-12 13-19 20-26 27-02 03-09 10-16 17-23 24-02 03-09 10-16 17-23 24-30 31-06 07-13 14-20 21-27 28-04 05-11 12-18 19-25 26-01 02-08 09-15 16-22 22-29 30-06 07-13 14-20 21-27 28-03 04-10 11-17 18-24 25-31 01-07 08-14 15-21 22-28 29 - 05 06-12 13-19 20-26 27-02 03-9 10 - 16 17-23 24-30 01-07 08-14 15-21 22-28 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Monetary Policy Report Vol. 4 No. 4/2011 Page 5

per barrel. In Q1, it firmed by 22.4 percent but declined by 7.6 percent in Q2 and by 6.3 percent in August. The end-August price represented an increase of 46.8 percent in yearon-year terms.

Ghana: Cumulative Cocoa Purchases (tonnes)

4.3.2 Cocoa Cocoa prices have staged a modest

Season MAIN

Crop Year 2009/10 587,166 580,000 101.24 44,858 40,000 112.15 2010/11 916,810 850,000 107.86 80,393 80,000 100.49

Actual (33 weeks) recovery after being pressured Proj. for season throughout May. The lower trend in Share (%) cocoa prices is closely linked to the LIGHT Actual (9 weeks) Proj. for season improved political climate in Cte dIvoire. Share (%) The improved supply outlook has been
over 60 percent of global output.

Change (%) 56.1 46.6 79.2 100.0

further boosted by benign weather in Cte dIvoire and Ghana, which together account for

In Ghana, the 2010/2011 light crop season purchases commenced on 16 June. Cumulative purchases from that date to the week ending 11 August 2011 (9 weeks) came in at 80,393 tonnes, 79.2 percent higher in year-on-year terms, compared with the first nine weeks of the last light season. Price developments The London International Financial Futures
2,600 2,400 2,200 GBP / Tonne 2,000 1,800 1,600 1,400

Developments in LIFFE cocoa prices: (Jan-Dec 2010 & Jan-Aug 2011) Jan-Dec'10

Exchange (LIFFE) weekly average price in the 2011 year-opening was 2,039.00 per metric tonne. For the January-August 2011 period, the average weekly LIFFE price was 1,986.6, compared with the average of 2,259.50 over the corresponding period in 2010. The end-August 2011 price of 1,910.00

Jan-Aug' 11

represented a weakening of 1.8 percent in yearon-year terms.

In terms of the CSCE1 US$ price however, the end-August price was $3,044.00 per metric tonne and represented a firming of 11.4 percent in year-on-year terms. 4.3.3 Gold

Gold extended its rally to a record level above $1,900 on 22 August as mounting concern that the global economy was faltering spurred demand for bullion as a protection of wealth.

Coffee, Sugar and Cocoa Exchange

Monetary Policy Report Vol. 4 No. 4/2011 Page 6

3 0 -- 0 5 06-12 13-19 20-26 23 09 0 7 -- 0 2 10-16 17-23 24-02 03-09 10-16 17 23 2 4 -- 3 0 31-06 07-13 14 20 2 1 -- 2 7 28-04 05 11 1 2 -- 1 8 19-25 26-01 02-08 09-15 16-22 22 29 3 0 -- 0 6 07-13 14-20 21-27 28-03 04-10 11 17 1 8 -- 2 4 25-31 01-07 08-14 15 21 2 28 2 9 2- -- 0 5 06-12 13-19 20-26 27 02 0 9 1 0 7- -31- 6 14-23 2 30 0 1 -- 0 7 08-14 15 21 22-28 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Gold and the Swiss franc once again hit record levels as investors poured money into an ever-narrowing range of safe assets. Investors ranging from sophisticated hedge funds to European savers were turning to bullion as they pulled money out of tumbling equity markets.

Price developments
1,900 1,800

Developments in the price of Gold: (Jan-Dec 2010 & Jan-Aug 2011) Jan-Aug'11

Over the January August 2011 period, spot price of gold rallied 29.3 percent from
$ p er f/oz

1,700 1,600 1,500 1,400 1,300 1,200 1,100 1,000 900

$1,384.73 to $1,790.00 per ounce, with some fluctuations being registered over the period. The max-min prices were $1,842.77 (third week of August) and $1,337.79 (last week of January).

Jan-Dec'10

The average weekly price in 2011:H1 was $1,443.90 per fine ounce, compared with

$1,151.80 in 2010:H1. In July and August, the spot price of gold rallied by 16.02 percent. 4.4 4.4.1 Currencies Markets Movements of selected currencies
MOVEMENTS OF SELECTED CURRENCIES AGAINST THE US DOLLAR (%)
Pt-to-pt. (%) Advanced Economies Euro Pound Yen Euro zone Jan Feb Mar Apr May Jun Jul Aug Aug-10 (y/y) Jan Feb Mar Apr May Jun Jul Aug* Aug-11 (y/y) -2.2 -4.2 -0.8 -1.2 -6.4 -2.7 4.8 0.7 -9.5 1.0 2.2 2.7 3.1 -0.8 0.4 -0.9 0.3 11.0 UK -0.4 -3.4 -3.6 1.8 -4.3 0.6 3.6 2.3 -5.2 1.2 2.1 0.2 1.3 -0.1 -0.8 -0.4 1.3 4.6 Japan -1.3 1.0 -0.6 -2.9 1.6 1.3 3.8 2.6 11.2 0.7 0.1 1.1 -1.9 2.6 0.8 1.5 2.8 10.8 Rupee India 1.4 -0.8 1.8 2.3 -2.8 -1.7 -0.6 0.6 3.8 -0.8 0.1 1.0 1.3 -1.2 0.2 0.9 -1.9 2.9 Emerging Market & Developing Economies Real Ruble Peso Rand Gh. Cedi Brazil 2010 -1.6 -3.4 3.2 1.7 -3.1 0.4 2.0 0.5 4.9 2011 1.1 0.6 0.5 4.6 -1.7 1.7 1.5 -2.3 10.0 Russia 0.8 -1.0 2.0 1.3 -4.3 -2.5 2.2 0.6 4.3 2.4 3.0 2.9 1.3 0.5 -0.2 0.2 -3.3 5.3 Chile 0.3 -5.8 1.8 0.5 -2.5 -0.6 1.4 4.4 7.9 -3.6 3.5 -1.0 2.1 0.5 -0.4 1.6 -1.3 8.4 S. Africa 0.4 -2.8 3.6 0.8 -3.8 0.0 1.6 3.2 9.1 -1.7 -3.4 4.1 2.6 -1.9 0.9 0.0 -4.5 2.6 Ghana 0.0 0.1 0.6 0.1 -0.3 -0.4 -0.7 0.4 2.1 -1.9 0.3 -0.4 0.4 -0.4 -0.2 -0.1 -0.3 -5.3

4.4.2

Currency war

Monetary Policy Report Vol. 4 No. 4/2011 Page 7

30-05 06-12 13-19 20-26 27-02 03-09 10-16 17-23 24-02 03-09 10-16 17-23 24-30 31-06 07-13 14-20 21-27 28-04 05-11 12-18 19-25 26-01 02-08 09-15 16-22 22-29 30-06 07-13 14-20 21-27 28-03 04-10 11-17 18-24 25-31 01-07 08-14 15-21 22-28 29 - 05 06-12 13-19 20-26 27-02 10 03-9 - 16 17-23 24-30 01-07 08-14 15-21 22-28 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Both the yen and the Swiss franc rose sharply against the US dollar in June-July as concerns about the future of the euro weakened the single currency and the protracted debt talks in the US weighed on the US dollar.

On 03 August, Switzerlands national bank intervened to weaken the Swiss franc and said it would increase the supply of the Swiss currency to money markets to stem the rapid rise of the franc.

Just a day after, Japan also intervened in the currency markets to slow the rapid rise of the yen, in the latest response by policymakers to deal with the worsening outlook for the global economy.

As part of its package to weaken the yen, the Bank of Japan also announced more quantitative easing. It announced an additional Y10 trillion to its Y40 trillion asset-purchase programme, to limit the damage of the countrys rising currency on the export-driven recovery in the wake of the devastating earthquake and nuclear disaster earlier this year.

Some analysts are sceptical whether the combination of Tokyos yen intervention and additional easing by the BOJ will have the desired effect of holding down the yen.

Section II: External sector developments 4.5 4.5.1 Local foreign exchange market Nominal performance of the Ghana cedi Bilateral and Effective

Bilateral movements

Monetary Policy Report Vol. 4 No. 4/2011 Page 8

BILATERAL MOVEMENTS OF THE CEDI AGAINST CORE CURRENCIES

Month Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Gh/$ 1.4279 1.4266 1.4175 1.4169 1.4210 1.4270 1.4365 1.4311 1.5024 1.4975 1.5031 1.4971 1.5028 1.5054 1.5062 1.5121 Gh/ 2.3095 2.1847 2.1282 2.1565 2.0433 2.0990 2.2344 2.1998 2.3473 2.4048 2.4419 2.4771 2.4356 2.4064 2.4514 2.4841 Gh/ 2.0037 1.9332 1.9167 1.8756 1.7465 1.7486 1.8546 1.8084 2.0485 2.0631 2.1643 2.2213 2.1589 2.1523 2.1508 2.1832 Monthly change (%) Year-on-year changes (%) $/Gh /Gh /Gh $/Gh /Gh /Gh 2010 0.0 -0.4 2.5 -10.2 -20.7 -15.6 0.1 5.7 3.6 -7.1 -12.2 -12.4 0.6 2.7 0.9 -2.5 -7.5 -4.3 0.0 -1.3 2.2 -0.8 -4.8 -1.4 -0.3 5.5 7.4 1.4 7.3 14.2 -0.4 -2.7 -0.1 3.3 13.3 18.4 -0.7 -6.1 -5.7 3.5 6.7 11.8 0.4 1.6 2.6 2.1 7.8 15.4 2011 -1.92 -3.96 -5.12 -5.0 -1.6 -2.2 0.33 -2.39 -0.71 -4.7 -9.2 -6.3 -0.37 -1.52 -4.68 -5.7 -12.8 -11.4 0.40 -1.42 -2.57 -5.4 -12.9 -15.6 -0.38 1.70 2.89 -5.4 -16.1 -19.1 -0.17 1.21 0.31 -5.2 -12.8 -18.8 -0.05 -1.84 0.07 -4.6 -8.9 -13.8 -0.39 -1.32 -1.48 -5.4 -11.4 -17.2 Memorandum Period Cumulative Movts. (%) $/Gh /Gh /Gh 2010:Q1 0.7 8.0 7.0 2011:Q1 -2.0 -7.9 -10.5 2010:Q2 -0.7 1.6 9.5 2011:Q2 -0.2 1.5 0.6

Point-to-point Qtly Movts (%) $/Gh /Gh /Gh Mar-10 0.7 8.1 7.2 -2.0 -7.7 -10.2 Mar-11 Jun-10 -0.7 1.4 9.6 -0.2 1.5 0.6 Jun-11

Developments in the nominal bilateral exchange rates of the cedi against the three core currencies the US dollar, the pound sterling and the euro showed that in August 2011, the cedi depreciated by 5.4 per cent, 11.4 per cent and 17.2 percent against the US dollar, the pound sterling and the euro respectively in year-on-year terms, as compared to an appreciation of 2.1 per cent, 7.8 per cent and 15.4 per cent to the dollar, pound and euro respectively in the corresponding period in 2010. Nominal Effective Exchange Rates (NEERs) Trade Weighted Index (TWI) The major (or core) Trade Weighted Index (TWI) is an index measure of the value (January 2002=100), in nominal terms, of the cedi relative to the currencies of Ghanas top three trading currencies the euro, the pound and the dollar. It is thus a nominal effective index.

Monetary Policy Report Vol. 4 No. 4/2011 Page 9

Core TWI for Cedi (Jan. 2005-Aug 2011)

70.0 65.0 60.0 55.0 Index 50.0

Core FXTWI (Jan. 2005-Aug. 2011)

80.0 75.0 70.0 65.0

3-mnth M.A.

3-Mnth M.A. 60.0

TWI
45.0 40.0

FXTWI
55.0 50.0

35.0

45.0
30.0

40.0
Ja n Ap -05 r0 Ju 5 l Oc -05 t-0 Ja 5 n Ap -06 r0 Ju 6 l Oc -06 t-0 Ja 6 n Ap -07 r0 Ju 7 l O -07 ct Ja 07 n Ap -08 r0 Ju 8 l O -08 ct Ja 08 n Ap -09 r0 Ju 9 l O -09 ct Ja 09 n Ap -10 rJu 10 l O -10 ct Ja 10 nAp 11 rJu 11 l-1 1

Months

Nominal TWI and FXTWI (Jan-Aug, 2010 and 2011)

2010 Dec-09 TWI FXTWI 36.12 48.90 Aug-10 39.05 49.89 Change (%) 2.9 1.0 Dec-10 37.57 47.60 2011* Aug-11 34.35 46.74 Change (%) -3.2 -0.9

For the January-August 2011 period, the cedi depreciated by 3.2 percentage points in trade-weighted terms. This compares with appreciation of 2.9 percentage points over the corresponding period in 2010. The August 2011 value of the index was 34.35 and was 0.21 of a percentage point below its quarterly trend represented by the 3-month moving average. Foreign Exchange Transactions Weighted Index (FXTWI) Like the TWI, the FXTWI is nominal and effective, the difference being that while the TWI uses total merchandise trade (i.e. imports plus exports) as weights, the FXTWI uses the value of total foreign exchange transactions (i.e. purchases and sales) in the three core currencies as weights. The FXTWI also shows that over January August 2011, the cedi depreciated, in FX transactions-weighted terms, by 0.9 of a percentage point as compared with appreciation of 1.0 percentage point in the corresponding period in 2010. The August 2011 value of the index of 46.74 was 0.14 of a percentage point below the quarterly trend value.

Monetary Policy Report Vol. 4 No. 4/2011 Page 10

Ja n Ap -05 rJu 05 O l-05 ct Ja 05 n Ap -06 rJu 06 Oc l-06 tJa 06 n Ap -07 r-0 Ju 7 l O -07 ct Ja 07 nAp 08 rJu 08 O l-08 ct Ja 08 n Ap -09 r0 Ju 9 l O -09 ct -0 Ja 9 n Ap -10 rJu 10 l O -10 ct Ja 10 nAp 11 rJu 11 l-1 1

4.5.2

Real exchange rate developments

For the first seven months of 2011, the Ghana cedis real exchange rate showed a cumulative appreciation of 0.3, 2.4 and 8.2 percent against the euro, the pound the US dollar respectively.
Real Bilateral Exchange Rate Developments
Month 2005:Jan-Jul 2006:Jan-Jul 2007:Jan-Jul 2008:Jan-Jul 2009:Jan-Jul Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 RERI (Jan.02=100) EUR GBP USD 99.1 108.1 132.0 101.2 110.4 139.5 99.7 106.5 147.8 85.9 107.5 144.2 89.1 121.8 131.8 89.7 90.8 92.7 94.8 102.6 107.0 102.6 91.7 92.4 90.0 88.3 90.0 91.0 92.9 116.1 122.2 128.4 127.2 135.0 135.5 130.9 118.3 117.9 118.4 117.7 119.5 121.8 122.7 130.8 134.0 136.4 138.3 140.6 142.3 142.9 133.4 136.4 136.7 138.4 139.8 141.4 142.6 MONTHLY CHANGE (%) EUR GBP USD EUR 14.1 -0.5 3.6 -0.6 -4.8 CUMULATIVE (%) GBP USD 13.5 12.8 -0.5 7.3 5.1 6.5 8.6 7.4 -11.5 -6.9

2010 3.3 6.0 1.8 2.1 7.8 4.4 -4.4 2011 -0.8 0.6 -2.4 -1.7 1.7 1.0 1.9

2.1 6.1 6.2 -1.2 7.8 0.5 -4.6 -2.0 -0.4 0.4 -0.7 1.8 2.4 0.8

1.2 3.2 2.4 1.9 2.3 1.7 0.5 -1.0 3.0 0.3 1.7 1.4 1.7 1.1

11.1

14.4

6.8

25.5 21.1

21.5 14.8

12.7 12.1

-2.6

-1.9

2.3

-1.5 0.3

1.5 2.4

7.0 8.2

Comparatively, for the corresponding period in 2010, the cedis real exchange rate cumulatively appreciated by 21.1, 14.8 and 12.1 percent respectively against the euro, the pound and the US dollar. 4.5.3 Inward remittances

Private inward transfers received by NGOs, embassies, service providers, individuals etc. through the banks for January to July 2011 amounted to $9.97 billion, which represents 54.1 percent increase over the transfers through banks in January to July 2010. The impressive growth was reflected in all the seven months with July alone recording a growth of 46.7 percent in year-on-year terms.
Year 2007 2008 2009 2010 2011 2007-8 2008-9 2009-10 2010-11 2007-8 2008-9 2009-10 2010-11 INWARD TRANSFERS THRO' BANKS Jan - Jul, 2007 - 2011 ($'million) Q1 Q2 JUL JAN. - JULY 1,516.82 1,651.78 516.54 3,685.14 2,132.26 2,151.12 701.32 4,984.69 1,976.59 2,249.49 815.81 5,041.88 2,500.96 3,028.50 939.08 6,468.54 4,219.96 4,369.92 1,377.78 9,967.67 Change ($'m) 615.44 499.34 184.78 1299.56 -155.67 98.37 114.49 57.19 524.37 779.02 123.27 1426.65 1719.01 1341.42 438.70 3499.13 Change (%) 40.6 30.2 35.8 35.3 -7.3 4.6 16.3 1.1 26.5 34.6 15.1 28.3 68.7 44.3 46.7 54.1

Monetary Policy Report Vol. 4 No. 4/2011 Page 11

Private Inward Transfers (Jan-Jul: 2002 - 2011) 10,000 9,000 8,000 7,000

Of the tot
$ illio 'm n

6,000 5,000 4,000 3,000 2,000 1,000 0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2 002 Banks ($'m) 78 1 .20 20 03 1 6 2.36 ,1 20 04 1 4.1 ,51 1 200 5 2 ,356.07 200 6 3 ,258 .85 200 7 3 ,685.1 4 200 8 4,9 84.69 2 009 5,0 41 8 .8 2 01 0 6,4 68.54 2 01 1 9,9 67.6 7

al tra nsf ers fro m

January to July 2011, $1.13 billion (or 11.38%) accrued to individuals, compared with $930.6 million (or 14.4%) in 2010.
1,200.0 Transfers to Individuals (Jan-Jul: 2005 - 2011) 30 25 20 15 10 5 S h are (% )

Even though the value of transfers received by individuals through banks increased over the 2005 2011 period, nonetheless, the share of
$ 'm ill.

1,000.0 800.0 600.0 400.0 200.0 -

individual to the total inward transfers declined over the period. 4.6 Gross and Net International Reserves

2005 666.2 28.3

2006 891.4 27.4

2007 881.1 23.9

2008 972.7 19.5

2009 867.3 17.2

2010 930.6 14.4

2011 1,134.53 11.38

Developments in both the Gross International Reserves (GIR) and Net International Reserves

Level ($'m) Share (%)

(NIR) in the first eight months of the year were marked by significant fluctuations. The GIR peaked at $4.88 billion in April 2011, but declined by 5.2 percent to $4.63 billion in July 2011. As at 19th August, it had declined further by 2.2 percent to $4.53 billion. The August level of GIR however represented a year-on-year increase of 36.7 percent. The August 2011 GIR position of $4.53 billion translates, on the average, into goods and services import cover of 3.5 months.
For further information, contact: Financial Stability Department, Bank of Ghana, Accra. Tel: +233 30 2666902-8 (Ext. 4851) Fax: +233 30 2660844 Website: www.bog.gov.gh

5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500

GIR and NIR (Jan. 2005 - Aug. 2011)

GIR

NIR

Monetary Policy Report Vol. 4 No. 4/2011 Page 12

M ay Au 05 gNo 05 vFe 05 b M -06 ay Au -06 g No -06 vFe 06 b M -07 ay Au 07 gNo 07 vFe 07 bM 08 ay Au -08 g No -08 vFe 08 bM 09 ay Au 09 g No -09 vFe 09 bMa 10 y Au -10 gNo 10 vFe 10 bM 11 ay Au 11 g11