The Association of Ghana Industries (AGI) is looking forward to a decrease in the policy rate as the Bank of Ghana is set to reveal its latest monetary policy decision today.
During its last Monetary Policy Committee (MPC) meeting, the Central Bank increased the benchmark policy rate by 100 basis points to 28 percent, citing persistent inflationary pressures.
Nevertheless, AGI Chief Executive Officer Seth Twum Akwaboah is of the opinion that the current conditions are conducive to a rate reduction.
In a media interview, he highlighted the improving macroeconomic indicators, including the recent appreciation of the Ghana cedi against the US dollar, as reasons for a potential change in the policy approach.
Seth Twum Akwaboah stated that a lower policy rate could alleviate borrowing costs and provide essential relief to businesses.
“I believe that the MPC is always influenced by various parameters and the overall improvement in the macroeconomic environment. Thus, we certainly anticipate some progress in that regard. The MPC largely dictates the interest rate as banks depend on it.
“With the enhancements in the macroeconomic landscape, along with the strengthening of the cedi… the stability we are witnessing, we also expect that the policy rate will adjust to reflect the interest rate so that companies can benefit, which is essential for reducing production costs and translating that into lower prices for businesses. We anticipate a downward adjustment, all things considered,” he remarked.
