Some commercial banks operating in the country say they are yet to finalize processes to determine the level of readjustment of their interest rates to reflect the drop in the policy rate.
The Monetary Policy Committee of the Bank of Ghana earlier this month reduced the rate at which it lends to commercial banks by 1.5 percent; from 16 to 14.5 percent.
According to the Bank of Ghana, the 150-basis points reduction in the rate which had been kept unchanged at 16 percent for at least five consecutive times, was influenced by the global developments due to the coronavirus pandemic.
This is expected to lead to a drop-in lending rates by commercial banks. But the Managing Director of Republic Bank, Farid Antar, told Citi Business News they will respond when all other factors of setting interest rates have been taken into consideration.
“Well I know we have done some of our calculations and we have intervened how much, and what necessary movement we would be able to take. I think that with the sort of pressure in the industry, especially in the markets, we may need to bring it down a little bit more so we are working on an amount to see what we can afford, but we have not yet made that announcement,” he said.
Republic Bank is the first financial institution in the country to have deferred loan repayment for workers and customers by six months to enable them stabilize in the wake of the pandemic.
With the impact of the coronavirus since it’s outbreak in December, 2019, having a serious impact on the global economy, policymakers are looking for ways to respond by putting in place measures which come with difficult economic trade-offs.
Nana Addo announces GHS1bn stimulus for businesses
Meanwhile, as part of measures to mitigate the economic impact of the coronavirus pandemic to sustain businesses, President Akufo-Addo announced that all households and small to medium scale enterprises are to benefit from a stimulus package of one billion Ghana cedis.
Currently, Ghana has recorded 152 COVID-19 cases with 5 deaths and 2 recoveries.
“The Bank of Ghana has been following the news and developments of the outbreak of the COVID-19 Pandemic. Not only has the life-threatening nature and rapid transmission of this disease been felt globally, it’s significant impact on the global economy is also being felt, especially in advance economies. Central Banks in these jurisdictions, have taken measures to mitigate the negative impact of the Pandemic.”