The monetary policy rate has once again been maintained at 14.5% by the Monetary Policy Committee of Bank of Ghana. This marks the 6th time in the past 12 months that the figure which signals the rate at which the Central Bank will lend to commercial banks has been maintained.
In the statement issued by the Bank of Ghana announcing the stay of the rate at 14.5 %, the Monetary Policy Committee, attributed the decision to a number of factors including the emerging short-term pressures on inflation emanating from rising crude oil prices and the direct and secondary price effects of the revenue measures announced in the 2021 budget.
Speaking to Citi Business News about the impact of the stay of the policy rate economist and lecturer at the University of Ghana Business News, Dr. Patrick Asuming said, the maintenance of the rate will mean the desire for cheaper cost of credit will likely not materialize for small and medium-sized businesses in the short term.
“For small businesses who may have been expecting that interest rate may have gone down, they might be a little bit disappointed. If you look at the current loan pricing formula (the Ghana Reference Rate), there are three things that go in there. The MPR with a weight of 40% is there. The interbank rate and the Treasury bill rate are also there. If the MPR has been kept constant, then maybe if the other 2 see a reduction, then loan rates might go down, but I don’t see that happening.”
He also adds that the rate in unlikely to be changed at the next announcement in May
“I think is the short term, as they are expecting that they might start to see the impact of the revenue measures by way of higher prices, I don’t think we should expect that they would reduce probably in May. If the impact of the COVID pandemic however dies down, you never know what might happen.”