The Association of Ghana Industries (AGI) is impressing on the central bank to reduce the policy rate and assist businesses to thrive.
It comes on the back of the decision by the Monetary Policy Committee (MPC) to maintain the policy rate at 26 percent.
Although the CEO of the AGI, Seth Twum Akwaboah says the decision could reflect a relative stability in the economy, a reduction would have been much appreciated.
“Maintaining the policy rate at 26 percent means that cost of credit will not come down but now considering the stability achieved since the beginning of the year, businesses were expecting a bit of reduction to give us some comfort because by reducing it, it is very likely that our cost of credit will also come down.”
The Monetary Policy Committee of the Bank of Ghana on Monday, kept the policy rate unchanged for the fifth consecutive time since it was last increased in November 2015.
Governor, Dr. Abdul Nashiru Issahaku explained that the decision was influenced by the stability in the depreciation of the cedi inflation over the period.
Mr. Akwaboah was however optimistic of a reverse in the trend soon.
“This decision also means that stability has been consolidated for quite a while, we also have a positive outlook that in the coming months, we will see further reduction.”
An economist, Dr. Eric Osei Asibbey described the central bank’s decision to maintain the policy rate at 26 percent.
He explained to Citi Business News the move will constrain economic growth.
“Businesses are reeling under difficult conditions. If you look at the fact that the business environment is not too conducive, utility bills have gone up, taxes are being raised, and if you also have to borrow at that rate, then of course we are not creating that kind of conducive environment for businesses to thrive,” he lamented.