This is coming at a time that the Monetary Policy Committee begins its 100th quarterly meeting, from today 26th May, 2020 to review the state of the Ghanaian economy.
Prior to the end of the year, there were high expectations that the policy rate – the rate at which commercial banks borrow from the BoG – will fall to lower the borrowing costs of household and business consumers.
Fitch Solutions and Moody’s Analytics have all projected about 1.0 percentage point drop in the policy rate by May this year. Their forecast were based on expected lower inflation and improve growth rate in the first quarter of this year.
However, the large financing gap and debt which possess some threat to the economy could compel the MPC of the BoG chaired by Governor Dr. Ernest Addison to maintain the policy rate at 14.5% for the 7th consecutive time since March last year.
“And don’t forget that the policy rate level will also have something to do with interest rate, so we are in a dichotomy; we either keep the policy rate where it is and let the private sector not get access to cheap credit to expand the economy”, he further said.
The MPC will also assess the Bank of Ghana’s Composite Index of Economic Activity, the Business and Consumer Confidence indicator and make forecast for inflation and exchange rate, as well as proffer advise to the central government on measures to tackle the nation’s rising debt.
Source: myjoyonline.com
