Dr. George Domfe, a Senior Research Fellow at the Center for Social Policy Studies at the University of Ghana has stated that Fitch fact-finding has Proved recently that Bank of Ghana (BoG) will continue its hiking cycle if care is not taken. Raising the monetary policy rate to 24.00% by year-end, after having hiked by 300 basis points, calls for an emergency solution.
Fitch Ratings cut Ghana’s credit assessment further into junk on concerns that the West African country may restructure debt as interest costs surge.
The rating agency lowered Ghana’s long-term issuer default rating to CC, or four levels below investment grade, from CCC, according to a statement on Friday. The assessment signifies a “very high level of credit risk” where a “default of some kind appears probable,” according to Fitch’s rating scale.
The downgrade reflects the increased likelihood that Ghana will pursue a debt restructuring given mounting financing stress, with surging interest costs on domestic debt and a prolonged lack of access to Eurobond markets,” Fitch said. “We believe there could be an incentive to spread a debt restructuring burden across domestic and external creditors.”
He revealed that, the Bank of Ghana’s failure to fall under grade C, according To Fitch investigation shows the inability of the country.
According to Dr. George Domfe, If Ghana and United Nations make one’s way for financial assistance, the interest rate of Ghana will go up by 15% and even more than the United nation because of grades difference.
In an interview with the media, he made known that, the grading of countries’ financial status really matters in terms of everything which leaders of the nation should take it very seriously.
This is the second time in 2022 that Fitch has downgraded Ghana’s credit worthiness which needs to curb.
Source: Opemsuo.com/ Gloria Opoku