Economist, and Head of Finance Department at the University of Ghana Business School, Professor Godfred Bokpin has criticized the Bank of Ghana for delaying in announcing a reduction in the policy rate.
The Monetary Policy Committee of the Bank of Ghana today [27/3/2017] reduced the policy rate by 200 basis points to 23.5 percent from 25.5 percent.
Even though Prof. Bokpin described the reduction as welcoming, he, however criticized the central bank for delaying in announcing the reduction.
“Though I commend them for that, it’s a little bit of playing catch up now. It should have been done the last time they met in (January 2017). There was a compelling reason for the policy rate to have come down by 200 basis points then,” he argued.
He stated that the economy would have realized the impact if the central bank had reduced it in their last MPC meeting.
He pointed out that it will be prudent for the Bank of Ghana to be practical in responding to market actions and reactions.
“I think that it’s the way to go and I think Bank of Ghana would have to be proactive they would have to be more aggressive to some extent,” he stressed.
Meanwhile, Banking Consultant, Nana Otuo Acheampong is optimistic the reduction will give private businesses some breathing space.
“This is a respite which probably has come a little bit late. But it will mean that those who have resumed operations now, it’s going to be cheaper to operate and therefore the extra that they will be able to generate, they can use to settle some of their outstanding loans that they haven’t been able to meet so overall, the reduction is good news for our business and everyone else,” he said.
He recalled that businesses have suffered from high interest rates and the power crisis that hit the country recently.