Dr. Abdul Nashir Issahaku speaking at the event
The Governor of the Bank of Ghana (BoG) Dr. Abdul Nashir Issahaku has expressed worry about the high lending rate in the country.
According to him, the current lending rate, which hovers around 33 percent, was too high, adding that the Central Bank was working hard to bring it down.
Speaking at a press briefing in Accra on Monday, Dr Issahaku said the Central Bank was putting measures in place to bring down inflation, which is now at 16.9 percent.
The Governor said interest rates would automatically reduce if they bring inflation down.
“It is a worry and that is why we are working around the clock to bring down the rates. We will see the rate coming down if the disinflation process is consolidated and when inflation begins to come down substantially. Of course, it will pull down interest rate,” he said.
Policy Rate
Meanwhile, the Monetary Policy Committee of the Bank of Ghana on Monday announced that it has once again maintained the policy rate at 26 percent.
The Committee, since January, this year, has maintained the policy rate, which is the rate at which commercial banks borrow from the Central Bank.
Many have attributed the high lending rate to the Central Bank’s monetary tightening policy.
Dr. Issahaku said BoG was undertaking monetary tightening presently to control inflation, stating “it’s a bitter pill that we are swallowing now to ensure that stability returns to the economy and once that happens I am sure the interest rate will come down.”
By Cephas Larbi