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BoG's 22% policy rate: Ghanaians should prepare for tougher times — Financial analyst

A Financial Analyst, Courage Martey has predicted tougher times for Ghanaians following the increment in the policy rate from 19% to 22%.

Ernest Addison, Governor of the Bank of Ghana

Courage Martey speaking on the hike in the policy rate by the Bank of Ghana said "With this, we could expect a jump in the loan rate."

Speaking on TV3, he said the rise in the policy rate "means the cost of funds for banks and individuals are higher now. Brace yourselves for a higher rate."

The Bank of Ghana has increased its policy rate by 300 basis points to 22%.

The hike in the prime rate follows the emergency Monetary Policy Committee (MPC) meeting held by the Central Bank today, August 17, 2022.

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According to the BoG, the latest rate was arrived at due to the current economic situation and the risks to the inflation outlook.

With the increment in the policy rate, interest rates on bank loans to households and businesses are expected to increase, making the cost of production by businesses more costly.

The increment in the policy rate by the Central Bank is believed to be mainly due to the country's rising inflation and heightened pressures in the foreign exchange market regarding the depreciation of the cedi.

"Under the circumstances, and considering the risks to the inflation outlook, the Committee decided on a 300 basis points increase in the Monetary Policy Rate to 22 percent," the BoG said in a statement.

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