![](\"http:\/\/www.ghanamma.com\/wp-content\/uploads\/2022\/10\/Dr.-Williams-Peprah-1.png\")
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US-based Associate Professor of Finance at Andrews University in Michigan, Williams Peprah, is predicting a mixed development for the country as a result of the increase in the US interest rate to 3.75%.<\/p>\n
The Federal Reserve yesterday increased the benchmark rate to its highest in 14 years.<\/p>\n
The bank hopes pushing up borrowing costs will cool the economy and bring down price inflation.<\/p>\n
According to Professor Peprah, the increase in interest rate would make investing in the US economy better than Ghana, leading to capital flight and a stronger dollar.<\/p>\n
\u201cAn increase in the interest rate by US Federal Reserve by 0.75% to 3.75% will impact Ghana\u2019s economy both negatively and positively. The negative side is that it will lead to capital flight and a reduction in foreign direct investments into the country and the dollar will become stronger; and you may see the cedi devaluing more or faster\u201d.<\/p>\n
\u201cShould Ghana be able to attract investors into the country, you may have to be able to compensate or give higher returns of more than 3.75% [dollar rate] to investors.<\/p>\n
Dr. Peprah further stated that the goods and services from the USA to Ghana will also become expensive as their cost of credit will become expensive.<\/p>\n
However, he believes an increase in Ghanaian exports will positively impact the economy. \u00a0<\/p>\n
\u201cThe positive side is that it will make Ghana\u2019s exports cheaper\u201d.<\/p>\n
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