22% policy rate: Only time will tell about its impact – Ama Daaku

A member of the Communications team of the New Patriotic Party (NPP), Ellen Ama Daaku has indicated that she cannot tell whether the increment in the policy rate will yield results but time will tell.

On August 17, the Monetary Policy Committee (MPC) held an emergency meeting.

The meeting was occasioned by the current economic situation as the cedi keeps depreciating and how inflation is rising in Ghana.

The Committee decided on a 300 basis points increase in the Monetary Policy Rate to 22%.

Speaking on TV3 New Day Breakfast show on Thursday Augiust 18 on how she felt about the recent decision to increase the policy rate, Ellen Daaku asserted that the right authorities took a decision they believed to be the best way forward though it may be a short-term measure.

 “At this point and with the way our cedi is galloping, I believe the managers of the economy felt it was the best decision to take. We have to wait and see if it’ll work. I think one of the signals they wanted to send to all of us, the finance market and the whole world is that they are prepared to address the free fall of the cedi. I believe this is a short term measure,” she said.

She called on the authorities to look at the various price hikes holistically.

She was of the view that the decision taken would not really make any difference because in the long run, prices keep increasing based on varying factors and every time that happens, it cannot always result in policy increments.

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“This particular action for me, I don’t think would do anything different from what is going on. Would they come and add on to the efforts that we are making to make sure that the cedi at least stabilizes. Even if it stabilizes at ¢10, you know that it is ten so you can plan,” she said.

This year alone, the policy rate has been increased several times. From January, we had 14.5%, March had 17% and from May to July, we had it maintained at 19%. Ellen noted they’re hoping that though measures put in place earlier on to maintain the policy rate did not work, they’re hopeful that added up, things can get better.

“It’s one of the measures. We are hoping that added up to the other measures, it would work. We cannot know immediately. I mean, they took the decision yesterday and so by this morning and then going forward, we would know whether it would work”.

By Esther Aryee|3news.com|Ghana