The business community in Ghana is not enthused about the decision of the Bank of Ghana (BoG) to keep the policy rate at 13.5 per cent.
The central bank’s Monetary Policy Committee (MPC) maintained the policy rate at 13.5 per cent at its meeting on Monday, 26 July 2021.
The committee said this is because its assessment showed that the risks to inflation and growth were broadly balanced.
But the business community says anytime the central bank reduces or maintains the lending rate, it does not reflect at the various commercial banks when they go to borrow for their business operations.
They argue that high cost of doing business in the country is also a result of the high interest charged on loans.
Speaking in an interview with Class Business on the back of the BoG’s announcement, the Public Relations Officer of the Ghana Union of Traders Association (GUTA), Mr Joseph Tetteh-Pardi, urged the central bank to whip the commercial banks in line with the policy rate.
Mr Tetteh-Pardi said: “We’re not enthused with the maintenance of the policy rate because normally, what happens is that when policy rate is reduced or maintained, we don’t get the needed impact on the interest rate”.
“We don’t know why the commercial banks keep maintaining their interest rate while Bank of Ghana reduce their policy rate so we are not too enthused about it and it’s the same old story because we still don’t feel the impact as in the lending and borrowing rate…”
“We keep on saying that business is not attractive because the cost of borrowing and interest rate is extremely high from the commercial bank, so, we expect that when the BoG comes out with their policy rate downward, it should have an effect on our interest rate but we don’t see the reduction in that sector and that is our concern and we don’t know what is motivating the commercial banks to maintain their interest rate.
“We tried to find answers from the BoG but we’ve not gotten answers yet because we expect that anytime policy rate comes down it must have an effect on the interest rate.”