Economist Dr. Lord Mensah a lecturer at the department of finance at the University of Ghana business school said he does not see an increase in the policy rate any time soon.
According to him, the central bank is likely to maintain or reduce it further to benefit businesses as they are already stressed, due to the impact of covid19.
The policy rate decides the rate at which the Bank of Ghana (BoG) lends commercial banks which then influences the interest rate on loans.
The monitory policy committee of BoG is said to begin its meeting on Wednesday, July 22 2020 to access the health of the economy and publicize among other things the policy rate.
“I will call for an ease in the system i.e. a reduction meaning if we are to go by the transmission of the monitory policy into the interest rate structure then obviously we could say that a reduction is going into our lower industry so that businesses and individuals can go to the bank or financial institutes,” he told the Citi business news.
He stressed that it will be wise for BoG to reduce the rate to ease the burdens on businesses.
“looking at the happenings on the ground with coupled with the covid19 case we could see that businesses are not that active and in every economy when business is not active it could be as a result of funds that people are not getting, money not in the pockets to enjoy the services rendered as a monitory policy who controls how money comes in and out of the system” he added.
Source: Mybrytfmonline/Pechi-Anim Alnice Padikie
