Ghana relieved as U.S Federal Reserve maintains policy rate
The U.S Federal Reserve, which is equivalent to Ghana’s Bank of Ghana, maintained the lending rate of the U.S at 0.5% at a meeting chaired by the Chairman of the Board of Governors of the Federal Reserves, Janet Yellen.
This is the first time the U.S is reviewing its lending rate after it was increased from 0% to 0.5% in December, 2015. Before this, the Federal Reserves had kept the rate at 0% for a decade.
Meanwhile, as is always the case, some analysts believe that U.S monetary policy rate ,at any point, will have consequences for Ghana, in terms of the interest rate at which it acquires funds on the international market.
Head of the Banking and Finance Department of the University of Ghana, Dr. Godfred Bokpin, in an interview with Pulse Business, said the move inures to the benefit of Ghana as far as competition for global funds is concerned.
“The U.S Federal Reserve’s decision to keep the rates at 0.5% is good for Ghana as it will likely not affect patronage of our international bonds.”
The Banking and Finance professor explained why the U.S rates have an impact on Ghana’s borrowing abilities.
“ The global financial market is immensely connected today. In this particular instance, the U.S is considered a more robust economy to lend to, as far as investors are concerned. They would much rather lend to the U.S instead of Ghana. And so any increase in the interest rate of Ghana is further incentive to pull out funds from Ghana and invest in the U.S money market”, he explained.
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