Economist Dr. Ebo Turckson, has called on the Monetary Policy Committee (MPC) of the Bank of Ghana (BOG) to reduce the monetary policy rate.
According to him, the current inflationary trends and a stable currency should be reasons for the MPC to reduce the policy rate.
The Bank of Ghana’s monetary policy committee is to begin its meetings on Friday and will announce on whether it will maintain or change its policy rate on Monday, March 25.
The Bank of Ghana in its first monetary policy committee meeting for this year maintained the policy rate at 26% citing reduced trends in prices and inflation.
The policy rate is the rate at which the central bank lends to banks and is also used by the banks to calculate their base rates.
Speaking to Citi Business News ahead of this month’s MPC meeting, Dr. Ebo Turckson who is also a Senior Lecturer at the University of Ghana said, the bank of Ghana must consider reducing the rate to reduce high interest rate.
“The currency has stabilized, inflation has toned down, so we should expect them to slightly reduce the rate. This is because of the fact that the rate itself when it’s changed, also fuels expectations on the interest rate, “But even though when the rate changes sometimes we do not see a corresponding change in the lending rate immediately in this country, let’s see what the MPC will do this time. But we expect them to bring down the rate so as to bring down the lending rate which hovers around 30 to 40 percent.” Dr. Ebo Turckson noted.
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