Economic agents will expect the central bank to maintain the policy rate- Lecturer

A lecturer at the economic department of the University of Ghana, Ebo Turkson says the Bank of Ghana should maintain the policy rate as the central bank is set to announce a new policy rate today May 22. The policy rate which is the figure at which the central bank lends to other commercial banks has seen a reduction early this year from 25% to 23.5% after staying at 26% for months.

In an interview with Radio Ghana, Ebo Turkson said the Central bank will be expected to maintain the policy rate as that will be the expectation of economic agents.

 

“Over the last three months or so we’ve seen inflation declining as you expect you will think that ……...which is monetary policy rate but over the last few days the Cedis depreciation starts to inch up a little bit and the currency also depreciating imaginably in that situation I expect them at least to maintain the policy rate because if really we are targeting inflation the most likely they will be expected to maintain the policy rate.”

“When they maintain the policy rate you don’t expect that it’s going to make any change already pertains as of now, so one’s depreciation begins to increase as you have seen as of now and ones the currency depreciate it fuels into the expectation of the economic agents who will expect inflation to be increasing therefore my might factor that into their economic decision making process.” He added.