FirstBanC Financial Services Ltd (FirstBanC), is expecting the reduction in policy rate from 23.5 to 22.5 percent to further boost Ghana’s economic growth.
The Monetary Policy Committee of the Bank of Ghana announced the new policy rate this week at its 76th meeting. The policy rate was reduced by 100 basis points, and has seen a downward trend since November 2016.
In its latest analysis of the policy rate, the FirstBanC research team noted that the pace of the country’s economic growth has quickened since the initial cut to the policy rate in November.
“The current reduction of the policy rate to 22.5% is expected to further boost growth through an increase in private sector credit and improved business sentiments, with the high levels of international reserves supporting exchange rate stability,” it said in a statement.
“The likelihood of price stability and sustained low inflation rate is high,” it envisaged.
It however warned of certain risks that can throw the current stability being enjoyed off course. For instance, it mentioned, higher-than-budgeted fiscal deficit; food and non-food price hikes; and Lower than expected oil production from TEN and Jubilee fields and low on-stream activity from the Sankofa GyeNyame Ntomme.
By Isaac Essel |3news.com| Ghana