Some banks have given indication of cutting their interest rates to reflect the reduction in the policy rate by the Bank of Ghana.
They explain that the move forms part of plans to reduce the plight of businesses and eventually correct the bad loans in their books.
The Bank of Ghana (BoG), in its 75th MPC meeting reduced its prime rate by 200 basis points to 23.5 percent.
Governor of the Central bank, Dr. Abdul Nashiru Issahaku cited declining inflation as basis for the decision.
Commenting on the development, the CEO of First Atlantic Bank, Odun Odunfa tells Citi Business News a slash in interest rates should help grow the banking sector.
“Whatever helps the economy we will support; the banking sector is just one sector in the whole economic chain…rates reduced means things are a bit easier for our customers and this means that things will be a bit better for us,” he stated.
Mr. Odunfa added, “Whatever makes our customers happy and feel better is what we pursue. For us it is a step in the right direction.”
The reduction in the policy rate is among other things expected to lead to a drop in interest rates.
But the CEO of First Atlantic Bank tells Citi Business News his outfit has already begun adjusting its rates to suit the cuts.
He however couldn’t readily disclose the areas and percentage of reduction.
“It is already reflecting… the interest rates for most of our loans have been reduced.”
Fidelity Bank to reduce interest rates for SMEs
In a related development, the Managing Director of Fidelity Bank Jim Baiden has assured that interest on loans will be affordable henceforth.
According to him, the reduction should among others ease the burden on Small and Medium Enterprises in financing their business operations.
“The cost of money and the cost of lending are guided by a set of rules and guidelines by the Central Bank and therefore our pricing is well informed by the policies that Bank of Ghana has put in place. But recently the prime rate has been taken down by 200 basis points to 23.5 %. It then follows that cost of credit will also trend downwards so I will say it will be affordable, the SME loans will be affordable.” he stated.
By: Pius Amihere Eduku/Jessica Ayorkor Aryee/citibusinessnews.com/Ghana