Ghanaians are expected to pay more with respect to interest on loans as the Monetary Policy Committee (MPC) has increased policy rate to 250 basis point to 24.5%, the highest policy rate since 2017.
In the heat of things, Governor of the Bank Ghana explained that this is to help control the rising cost of inflation as Ghana negotiates with the International Monetary Fund, however; this will adversely affect the cost of doing business and living standards in the economy.
“Inflation remains elevated, and the balance of risks is on the upside. Although the forecasts are for monthly inflation to continue to slow down, the risks are on the upside, emanating largely from pass-through effects of the currency depreciation, the recent upward adjustment in utility tariffs, and rising inflation expectations. The Committee remains committed to re-anchoring inflation expectations and returning to a disinflation path,” Dr Addison explained.”.
“The Committee remains committed to re-anchoring inflation expectations and returning to a disinflation path,” Dr Addison added.
“If you recollect, we started this policy-tightening as far back as November 2021. It wasn’t only in January when we got locked-down out of the market that the MPC started tightening it. We had already foreseen issues of prices rising, and therefore in November 2021 we did our first tightening of the monetary policy rate.”
“We were even ahead of the Fed and some of the more advanced countries in tightening our policy rate. And I believe in sub-Saharan Africa, the Bank of Ghana was one of the first central banks that moved away from easing the monetary policy stance because of the impact of covid to tightening the stance – because we could see it was about time we had a shift in policy stance, as we were moving away from impacts of the pandemic into this new regime of higher inflation rate,” he said.
All economic indicators seem to be on the rise negatively pouncing desperation and dilemma on Ghanaians. The cost of doing business will again stiffen the access to funds and capital to establish businesses, and Ghanaians can only wish for a future of favourable economic conditions.
