The Association of Ghana Industries (AGI) has welcomed the Bank of Ghana’s decision to maintain the policy rate at 26 percent.
The AGI says the decision also reflects a significant stability in the economy which in its view is relevant to the success of its members.
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.
Although the Chief Executive Officer of the AGI, Seth Twum Akwaboah tells Citi Business News he would rather have preferred a drop in the policy rate, the association is still satisfied with the BoG’s decision.
“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.”
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.”
However 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.