The Monetary Policy Committee (MPC) of the Bank of Ghana has again indicated its commitment towards a lower lending rates regime by further reducing the Policy Rate to 12.5 percent.
This represents a 50 basis point downward review of the initial rate of 13.5 percent. The committee made the announcement on Wednesday July 6, 2011 after its assessment of the relevant economic conditions since the last review.
According to the committee, the sources of uncertainty that existed during the last review have substantially abated but recent survey-based indicators point to some weakening in the growth potential.
Addressing the media, Dr Kwesi Amissah-Arthur, Governor of the Bank of Ghana said the current state of the economy, �and the assumptions on both the domestic and external economic outlook as well as the inflation forecast suggest that in the near term stable and favourable economic conditions will hold.�
The sluggish response of banks' lending rates to the policy rate adjustments however remain a concern to the central bank, he said. In a bod to address the issue, Governor Arthur revealed that a stakeholder committee has been constituted to review banks� base rate determination for standardization and transparency in the determination of lending rates. The committee, which is to be inaugurated on Thursday July 7, is to submit its recommendations in 4 weeks time for implementation.
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