The Ghana National Chamber of Commerce and Industry is asking the Bank of Ghana, BoG to ensure that the decision to maintain the policy rate at 16% translate into lower credit rates for the business community.
The Policy rate determines the rate at which BoG lends to commercial banks and subsequently how much people pay on their loans
But some businesses said even at 16% throughout 2019 the rate as made little impact as interest rate were still high.
Mark Badu Aboagye, CEO of the Ghana National Chamber of Commerce and Industry, the policy rate has not been effective on interest and cost of credit.
He added that they are looking forward for the Central Bank to ensure that a reduction or maintaining the policy rateÂ translates into lower credit rates for the business community.
"Our concern is not either increasing, reducing or maintaining the policy, it's how it translates into the cost of credit if our policy rate is coming down but its effect on the interest and cost of credit is not being very effective, we are looking at how going forward these reductions or this maintaining of policy rate will translate into a lower credit rate for the business community.." he said in an interview with Citi FM.
BoG maintains policy rate at 16% for the sixth time
The Monetary Policy Committee of the Bank of Ghana has voted to maintain the policy rate unchanged at 16 percent for the sixth consecutive time.
This has a direct impact on the interest people pay on their loans, as it determines the rate at which the Central Bank lends to commercial banks in the country.
The Chairman of the Committee, Dr. Ernest Addison, who is also the Governor of the Central Bank, speaking at the press conference on Friday morning, justified the decision to maintain the policy rate despite inflation declining to 7.9 percent, well within the Bankâ€™s medium-term inflation target.
The last time the policy rate was reduced was a year ago when the Bank reduced the rate by 100 basis points to 16 percent.
Dr. Addison stated that while inflationary pressures remain balanced, the committee nonetheless decided to keep the policy rate unchanged in a move that will be seen as a precautionary as the country heads into December 2020 elections.
"I think that is a very cool observation, inflation seems to be within our policy corridor and whether on the basis of that the Central Bank should have gone ahead to cut the policy rate, I think that in sense helps feel that were are being cautious and the reason for why we are being cautious is the dependent of our budget on external financing in particular non-resident participation in our bond market, it important they are very sure that the budget is fully financed before we can take any decision that may have implications on the financing of the budget."