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Economist Intelligence Unit predicts lower policy rate for Ghana in 2020

January 1, 2020 4:33 PM

The Economist Intelligence Unit has predicted that the Bank of Ghana will lower its lending rate in 2020

Finance Minister, Ken Ofori-Atta

This according to the advisory firm means that individuals and businesses seeking credit from commercial banks this year would be offered some relief.

The EIU said this in its latest report for Ghana, noting that, the Bank of Ghana’s policy rate currently pegged at 16 percent could be lowered further as inflation, which has been a driver, declines further.

The last time the Monetary Policy Committee of the Bank of Ghana reduced its policy rate, which is the rate at which central bank lends to commercial banks, was in January 2019.

Since then, the committee has met 5 times and kept the rate unchanged as inflation remained volatile.

But in its latest country report on Ghana, the Economist Intelligence Unit said inflationary pressures which have remained elevated throughout 2019 is set to moderate.

The firm argues that given the slowdown in inflation, there will be grounds for the Bank of Ghana to reduce its interest rate as it bids to support lending to the private sector.

Ghana’s inflation currently stands at 8.2 percent but the EIU predicts that the rate will largely remain unchanged throughout the period.