to meet this requirement and we may end the year ba es o f gh a na nk t. 1 9 5 7 with many more banks meeting the minimum capital requirement than was originally anticipated. this will help ensure a banking industry that is well capitalized and well - positioned to support the much needed economic transformation ghana needs. 5. we have been working with the fiscal authorities and other stakeholders to create the enabling environment to support growth and i am happy to report that we are beginning to see good results. at the last monetary policy committee meeting, we observed that economic activity continued to strengthen with robust export growth, higher industrial electricity consumption and higher tourist arrivals. overall, the country remains on a steady growth path with the first quarter 2018 gdp outturn estimated at 6. 8 percent, compared with 6. 7 percent in the same period of 2017. also, the bank ’ s updated composite index of economic activity ( ciea ) showed a strong pickup in the year to july. ghana recorded a trade surplus of $ 1. 4 billion at the end of august. headline inflation broadly declined and has ranged between 9. 6 and 9. 9 percent over the past five months, despite the marginal upticks occasioned by adjustments in administered prices. 6. the cedi ’ s strong performance against the major international currencies in the first quarter of 2018 weakened in the subsequent quarters ba es o f gh a na nk t. 1 9 5 7 as the currency came under pressure, mainly from emerging and frontier market contagion effects. factors such as the us fed rate increases due to continued monetary policy normalization, strengthening of the us dollar, rise in us yield rates, and the escalating trade tensions have all taken a toll on emerging market and frontier economy assets. 7. the combination of these factors have resulted in a tight financing conditions, reverse capital flows and exchange rate pressures in most emerging market and frontier economies, including ghana. however, different countries have responded differently depending on the strength of their underlying macroeconomic fundamentals. the impact on the exchange rate in ghana has been somewhat moderated compared to other ems and frontier economies — a testament to the gains in macroeconomic stability achieved over the past 18 months. while currencies in other ems are still under stress, ghana ’ s currency has recently regained some stability and the local currency is gradually becoming more stable. indeed ghana has recently received an upgrade by standard and poor ’ s to her sovereign credit rating on the back of improved monetary

policy effectiveness and improved banking sector stability. 8. our banking system is becoming stronger with capital adequacy ratio reported at 19. 1 per cent at the end of august, significantly above prudential requirement of 10 percent. non - performing loans of the industry continue to ba es o f gh a na nk t. 1 9 5 7 decline and we expect a major reduction as banks begin to implement write off policies, in line with approvals received from bank of ghana to address the legacy loans that have been fully provisioned for. we have also observed a return to efficiency in the industry as operating expenses across banks are beginning to reduce, which should ultimately result in declining interest rates. with the increased capitalization of banks, declining levels of non - performing loans, and better credit risk assessment in the banking system, we should expect the pricing of credit to reflect these trends. interest rates and spreads that have been slow to adjust should move in line with inflation. 9. these are the conditions which would lead to improved access to credit for small and medium enterprises to financial services. they constitute the largest population where the benefits of access to credit touch directly on the fabric of the society and income security, and the ultimate good of raising living standards. 10. as the bank of ghana continues to strengthen the regulatory and supervisory frameworks to restore confidence and promote stability and integrity of the banking sector, it is important that we do not overlook cyber security measures to combat financial crime. as part of the national cyber security awareness month ( ncsa ) in october, which was launched two ba es o f gh a na nk t. 1 9 5 7 days ago, the bank of ghana will inaugurate its security operations centre ( soc ) on the 22nd october and also launch the cyber and information security directive for the industry. subsequent to the issuance of the directive, banks would be required to follow an implementation schedule to ensure that effective cyber security controls are in place to counter any form of cybercrime. 11. through the bank ’ s monitoring systems we have observed the daily attempts by cyber criminals to bypass security controls and exploit vulnerabilities within the cyber and information security defenses of financial systems. to counter these, we are strengthening and increasing the scope of anti - money laundering risk - based supervision and collaborate with the financial intelligent centre ( fic ), economic and organized crime office ( eoco ) and other law enforcement agencies to reduce the incidence of cyber - attacks on the financial sector