In the wake of the COVID-19 pandemic and its impact, Ghanaian businesses had been looking forward to a further reduction in the policy rate by the Bank of Ghana.
The policy rate, which is the rate at which the central bank lends to commercial banks, and is also used by banks to calculate their base rates, was kept unchanged at 16 percent for at least five consecutive times prior to its reduction to 14.5% due to the COVID-19 pandemic.
But businesses still wanted a further reduction.
The Central Bank last Friday after its Monetary Policy Committee (MPC) meeting kept the policy rate unchanged at 14.5 percent.
It happens to be the first time the rate has been kept unchanged after it was reduced by 150 basis points early this year.
According to the central bank, the rate was maintained to control inflation especially in these times, so as to reduce the impact of the COVID-19 pandemic on businesses.
Chief Executive of the Ghana National Chamber of Commerce and Industry, Mark Badu Aboagye, agrees with the Central Bank’s decision to maintain the rate at 14.5 percent.
“Looking at the current economic conditions, we were not actually expecting a further reduction in the policy rate” he said.
For the Financial Welfare Officer of the Ghana Union of Traders Association (GUTA), Benjamin Yeboah, a lot more could have been done to cushion businesses further.
“There is nothing new. Like I said, unless we have a corresponding reaction from the financial institutions like the banks, then we can say it is having an impact on our businesses. But if government or the BoG comes out with it and there is a reduction, but we don’t see any change in interest payment, then, how do we gain from it?” he quizzed.
The Chief Executive Officer of the Private Enterprise Federation (PEF), Nana Osei Bonsu, also believes a further reduction could have been much appreciated as it would have been a turning point for the business community.