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Banks anxious of interest rate cut

Zenith Bank MD, Henry Oroh
MD/CEO of Zenith Bank, Henry Oroh

Bankers are anticipating a reduction in the policy rate as the Bank of Ghana’s Monetary Policy Committee (MPC) meets to review the strength of Ghana’s economy, Friday September 22, 2017.

The meeting will be concluded on Monday September 25, 2017 with a decision on the policy rate for commercial banks to comply with.

The MPC is also expected to outline the central bank’s plan for the economy for the rest of the year.

Already, some industry players have been sharing their expectations ahead of the announcement on Monday.

The Managing Director of Zenith Bank, Mr. Henry Oroh tells Citi Business News reducing the rate further will drive production and boost economic growth.

“When 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 the real sector. So what that does is to create an aggregate economy where production and employment go up.”

“So 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,” Mr. Oroh explained.

The policy rate is the primary rate at which commercial banks borrow for onward lending to customers.

For 2017, the Bank of Ghana’s MPC has reduced the rate three times or by 450 basis points.

The policy rate has been reduced from 25.5% to 21%.

By: Pius Amihere Eduku/citibusinessnews.com/Ghana

Ghana Business News