Economist, Dr. Lord Mensah has ruled out an immediate reaction from commercial banks following the reduction of the policy rate.<\/p>\n
[contextly_sidebar id=”HmPJw8JMhnVBKfoYifqTQMAtMdqWSjDX”]Though he has lauded the Bank of Ghana (BoG)\u2019s decision to reduce the rate, he describes the figure as marginal.<\/p>\n
According to Dr. Lord Mensah, businesses must therefore be guarded in their expectations of a reduction in interests charged on credit.<\/p>\n
\u201cFor businesses, I\u2019d advise them not to be in a haste to take decisions based on the reduction since the margin is not that high. It wouldn\u2019t be advisable to start borrowing and spend anyhow because the prospects are high,\u201d he opined.<\/p>\n
\u201cBusinesses are supposed to keep calm and consider the prospects in the future for the 25.5 percent; the margins are not high,\u201d he added.<\/p>\n
The BoG\u2019s Monetary Policy Committee (MPC) on Monday, reduced the policy rate for commercial banks by 50 basis points.<\/p>\n
The figure has therefore declined from 26 percent to 25.5 percent.<\/p>\n
Prior to the announcement on Monday, Dr. Lord Mensah stated that the economic conditions merited a reduction since the high interests were a disincentive to businesses.<\/p>\n
Meanwhile he has described the latest development as an indication of a further drop in the policy rate to compel commercial banks to reduce their base rate which is about 28 percent on the average.<\/p>\n
\u201cIt is a step in the right direction for businesses as the signal has come which shows that interest rates have started going down but this shouldn\u2019t raise their mood in terms of planning.\u201d<\/p>\n
Until Monday\u2019s decision, the MPC had kept the policy rate unchanged at 26 percent for four consecutive times this year.<\/p>\n
The policy rate is the rate at which the central bank lends money to commercial banks in the country.<\/p>\n
–<\/p>\n
By: Pius Amihere Eduku\/citibusinessnews.com\/Ghana<\/p>\n","protected":false},"excerpt":{"rendered":"
Economist, Dr. Lord Mensah has ruled out an immediate reaction from commercial banks following the reduction of the policy rate. [contextly_sidebar id=”HmPJw8JMhnVBKfoYifqTQMAtMdqWSjDX”]Though he has lauded the Bank of Ghana (BoG)\u2019s decision to reduce the rate, he describes the figure as marginal. According to Dr. Lord Mensah, businesses must therefore be guarded in their expectations of […]<\/p>\n","protected":false},"author":14,"featured_media":230178,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[121,32,11],"tags":[],"yoast_head":"\n