There are mixed expectations ahead of the policy rate to be announced later this morning by the Bank of Ghana.
The Monetary Policy Committee at its last meeting reduced the policy rate to 17 percent.
Some bankers and businesses Citi Business News has been speaking to all argue that the central bank must provide a rate that is favourable for the growth of businesses.
For this year alone, the Monetary Policy Committee has reduced the policy rate by three hundred basis points between March and May.
The first reduction of 200 basis points, took effect in March where the rate dropped from 20 to 18 percent.
The figure was reduced again in May; by 100 basis points, from 18 to 17 percent.
The Governor of the Bank of Ghana, Dr. Ernest Addison explained that the decision is based on the lack of any visible threat to inflation from both global and domestic developments in the near term.
Speaking ahead of this morning’s announcement, the CEO of the Ghana National Chamber of Commerce, Mark Badu Aboagye said he anticipates a reduction in the rate.
The Managing Director of the Royal Bank, Osei Asafo Adjei in an earlier interview with Citi Business News said the marginal rise in inflation may compel the central bank to at worse maintain the rate.
The policy rate refers to the figure at which the central bank lends to commercial banks.
This also helps commercial banks to determine their rate to be charged on loans to their customers.
As a matter of reviewing the high interest rates regime, the central bank has also introduced the Ghana Reference Rate which helps banks to assess a customer’s interest on loans after taking into consideration his or her risk in addition to the prevailing reference rate for the month.
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By: Pius Amihere Eduku/citibusinessnews.com/Ghana