Industry players are upbeat about a possible reduction in the policy rate to be announced by the Bank of Ghana later today.
Their hopes are largely built on the declining inflation as well as drop in interest rates on the Treasury bill market.
Already, some Economists say the pro-business agenda of the NPP government should culminate in a reduction of the policy rate from the current 25.5 percent.
Speaking ahead of today’s announcement, the CEO of the Association of Ghana Industries (AGI), Seth Twum Akwaboah told Citi Business News a reduced rate should ease the plight of Ghanaian businessmen.
“Our expectation and wish is that we could have an economy where the policy rate is stable and gradually coming down and not at the levels that we have.”
“I think that in considering the actual rate, a lot of factors are taken into consideration but our expectation generally is that once there is stability in inflation, interest rates are all coming down, we assume it is possible for interest rates to come down as well,” Mr. Akwaboah added.
For his part, the President of the Ghana Association of Bankers, Alhassan Andani believes the reduction in the policy rate should prompt commercial banks to also reduce their lending rates which currently averages 32.3 percent.
“Again inflation has come down twice and T-Bills have trended down significantly…so my sense is that if the bank of Ghana is protecting the value of money and inflation is an indicator of it, and also T-Bills are heading south, probable the policy rate will head south,” he told Citi Business News.
Earlier, Economist and Lecturer at the University of Ghana Business School, Dr. Lord Mensah told Citi Business News the current 25.5 percent policy rate is a disincentive for businesses hence must be reviewed downward.
“I am expecting a positive decision where the policy rate will be reduced…the current policy rate is even higher than the 91 day T-Bill rates which doesn’t conform to theory,” he observed.
By: Pius Amihere Eduku/Jessica Ayorkor Aryee/citibusinessnews.com/Ghana