Reduction in interest rates depends on Government – BoG

Governor of the Bank of Ghana, Dr. Kofi Wampah says government needs to do more to stabilise the economy in order to bring down interest rates.

Government over the past months has been on a campaign to force the commercial banks to reduce their lending rates.

But answering questions from journalists after an MPC meeting, Dr. Wampah says the buck stops with government.

According to him, the only thing the bank of Ghana can do is to encourage the banks by giving them incentives to drive down their lending rates.

“We have gone past the era where the central bank legislate some kind of ceiling on rates. We used to even legislate on how much credit banks would give to sectors like Agric.

“But the danger of that is, if there are bank failures, they are likely to ascribe it to those regulations. So the best way is to first achieve the sustainable macro-economic stability” he said.

Dr. Wampah however indicated that he will be meeting the banks soon to look at ways he can appeal to them to reduce their rates.

The governor also indicated that about $500 million of donor funds that were frozen is expected to come in from July this year to support projects outlined in the budget.

On the current issues at ADB, Dr. Wampah said the Central Bank is carrying out its own investigations into some of the issues raised.

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