There are mixed expectations ahead of the policy rate decision to be announced by the Bank of Ghana on Monday, September 25, 2017.<\/p>\n
The Monetary Policy Committee (MPC) of the central bank is set to announce a primary rate at which it will lend to commercial banks for onward lending to customers.<\/p>\n
Already, the rate has been reviewed downwards thrice this year alone.<\/p>\n
Citi Business News has been engaging some industry players who give varied reasons for their assertions.<\/p>\n
It is also worth to note that Monday\u2019s announcement is critical; that is if the policy rate is reduced, it will be the first time that the rate has gone down four times in a given year.<\/p>\n
Economist and Lecturer at the University of Ghana, Dr. Eric Osei Assibey tells\u00a0Citi Business News<\/strong>\u00a0though a reduction would be favourable, the marginal increases in prices of goods and services and the depreciation of the cedi may prompt the MPC to maintain the rate.<\/p>\n \u201cLooking at the market conditions now, it looks to me that maintaining it will be a much more prudent decision\u2026There appears to be some kind of heightened inflation expectations particularly from the gradual increase in fuel and ex-pump prices and also the cedi iss depreciating somewhat in recent times,\u201d he argued.<\/p>\n The Managing Director of Zenith Bank, Henry Oroh admits that the interest rate is but one component of factors influencing interest rates charged by banks.<\/p>\n He is however confident that further reducing the policy rate will cause banks to eventually reduce their rates to boost credit to businesses to drive employment creation and economic growth.<\/p>\n \u201cWhen you bring down interest rates, you encourage real investments. Investment accounts and savings in money markets become unattractive then people will be putting their monies into real sector so what that does is to create an aggregate economies where production and employment go up.\u201d<\/p>\n \u201cSo a low interest rate is good for the economy so if the MPC rate comes down a little further, anytime soon, it will be a good thing for the real sector,\u201d Mr. Oroh explained.<\/p>\n On his part, the Head of Risk and Regulation Faculty at the Ghana National Banking College, Dr. Francis Sasraku believes a reduction may be prudent this time around granted other conditions are right.<\/p>\n \u201cI think a downward direction will be a good thing for the country so far as we have the economic variables working positively because of the policies of the government and that will be in the interest of the country in the medium to long term,\u201d<\/p>\n For 2017 alone, the central bank has reduced the policy rate three times.<\/p>\n Cumulatively, the policy rate has been reduced by 450 basis points.<\/p>\n The rate has gone down from 25.5% in January to 21% presently.<\/p>\n –<\/p>\n By: Pius Amihere Eduku\/citibusinessnews.com\/Ghana<\/p>\n","protected":false},"excerpt":{"rendered":" There are mixed expectations ahead of the policy rate decision to be announced by the Bank of Ghana on Monday, September 25, 2017. The Monetary Policy Committee (MPC) of the central bank is set to announce a primary rate at which it will lend to commercial banks for onward lending to customers. Already, the rate […]<\/p>\n","protected":false},"author":14,"featured_media":204253,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[121,32,171,11],"tags":[],"yoast_head":"\n