Even though the Bank of Ghana has announced that it is maintaining its benchmark Monetary Policy Rate at 14.5 percent for the next two months, borrowers are benefitting from the fact that interest rates continue to fall in Ghana despite government’s unprecedented demand for fiscal deficit financing. Ultimately monetary easing by the central bank has negated the upward pressure on interest rates created by higher demand for credit by government although inevitably commercial banks having been moving from loans to the private sector, towards lending to government.
Lower interest rates at a time that government’s unprecedentedly high demand for credit is supposed to raise them – going by the basic economic principle of demand and supply – is a veritable achievement, effectively turning basic economic doctrine, proven over the past nearly two hundred years on its head. It has been achieved by the combination of several initiatives thought out outside of the box.
Source: Goldstreetbusiness.com
