Economist, Dr. Lord Mensah has stated that the Bank of Ghana may have maintained the policy rate at 17 per cent to avert any negative impact on the economy due to government’s move to introduce new tax measures.
“I think it’s in the right direction because for now, we do not know how the economy is going to be as a result of the budget that was read and some taxes are being introduced here and there”, he said.
He explained that reduction in the policy rate would have some negative consequences on the economy.
“So I presume that the MPC can’t go further to reduce the monetary policy rate because they might reduce it and then in the end, they may not get the impact that its suppose to make and so if they have maintained it I am in support of it” he added.
However some business associations such the Ghana Union of Traders Association (GUTA) wants the central bank to ensure the banks comply with the figure.
“We don’t see any corresponding reflection in the interest rate of the commercial banks so what really is the need for the reduction if the commercial banks do not respond? It becomes just an event. And that is the problem that we see”.
He explained that “ if there is no sort of conforming to some sort of directive for BoG that in a way can compel or push the commercial banks in doing something about their interest rate for commercial loans, then it is a real problem”.
The policy rate serves as the basis on which the Bank of Ghana lends to commercial banks for onward lending to their customers.
BoG maintains policy rate at 17%
The Bank of Ghana has maintained the policy rate at 17%.
The decision was arrived at after the central bank’s Monetary Policy Committee meeting on Monday, July 23, 2018.
This is the first time the rate has been maintained after it was reduced by 300 basis points early this year.
In March, the policy rate was reduced by 200 basis points from 20 to 18 per cent.
The rate was again reduced by 100 basis points; from 18 to 17 per cent.
The Governor of the Bank of Ghana, Dr. Ernest Addison disclosed the latest figure at a media engagement on Monday.
Citibusinessnews
