The Monetary Policy Committee (MPC) of the Bank of Ghana, is set to announce the policy rate later on Monday, July 27, 2020.
The rate is of keen interest to businesses, as it determines the rate at which the BoG lends to commercial banks, and subsequently influences interest rate on loans.
The Committee begun its 95th regular meetings from Wednesday through to Friday, July, 24, to review developments in the economy and take certain critical decisions.
The BoG at its last MPC meeting in May this year, maintained the rate at 14.5 percent, citing among other reasons the impact of COVID-19 on businesses and the need to cushion them.
That was the first time the rate had been kept unchanged in many months.
The MPC at the time said the decision to keep the policy rate unchanged, was to control inflation from going out of gear.
Already, many businesses, in the wake of the COVID-19 pandemic and its impact, have appealed for a further reduction in the policy rate by the Bank of Ghana.
Ahead of the announcement by the BoG, Economist, Dr. Lord Mensah, has told Citi Business News he expects the rate to be maintained or reduced further to lessen the burden on businesses hit by COVID-19.
“If you look at the happenings on the ground coupled with the COVID-19 cases, you could see that businesses are not that active. And in every economy when businesses are not all that active, it could be as a result of the bank not providing enough funds and as a result of money not being in people’s pocket to enjoy the services rendered by established businesses.”
“…And so as the Monetary Policy Committee that controls how money comes into the system and how money is taken out of the system, I will call for an ease in the system that is a reduction. This means that if we are to go by the transmission of the monetary policy into the interest rate structures, then obviously we could say that a reduction will build up into lower interest rates so that businesses and individuals can easily walk to the bank to do business,” he said.
