The Association of Ghana Industries (AGI) is anticipating a reduction in Ghana’s policy rate, ahead of the Bank of Ghana’s monetary policy announcement scheduled for today. This follows the Central Bank’s earlier decision to raise the benchmark rate to 28 percent due to persistent inflation. AGI, however, believes that the current economic environment justifies a shift in direction.
At the previous Monetary Policy Committee (MPC) meeting, the rate hike was implemented to counter inflationary pressures. Nonetheless, AGI CEO Seth Twum Akwaboah has cited a number of positive developments, including the recent appreciation of the Ghana cedi against the US dollar, as signs of macroeconomic recovery that could support a rate cut.
Akwaboah emphasized that a lower policy rate would reduce borrowing costs for businesses and stimulate economic activity. He noted that the MPC’s decisions are typically driven by prevailing economic indicators, which are currently showing promising trends.
He explained that with the Ghana cedi stabilizing and inflationary pressures easing, it would be appropriate for the Bank of Ghana to ease monetary policy. A lower interest rate, he said, would not only reduce the cost of production for companies but could also help lower prices for consumers.
In conclusion, AGI is optimistic that the improved economic conditions will prompt the Central Bank to cut the policy rate, thereby easing financial pressure on businesses and supporting broader economic recovery efforts. The business community is hopeful that the upcoming MPC decision will align with these expectations.
Source: Citi newsroom