The Technical Economic Advisor in the office of the Vice President, Dr. Gideon Boako, has disclosed that government is developing strategies to influence lower interest rates from commercial banks in the country.
One of the major strategies, he told Starr Business in an interview, is government’s resolve to reduce its appetite for treasury bills.
The government’s move has become necessary as many businesses complain of higher interest rates even though macroeconomic indicators show a nosedive in policy rates in the last six months.
The Bank of Ghana (BoG) ordered commercial banks in the country to reduce their interest rates in tandem with the recent reduction of the policy rate.
The Monetary Policy Committee of the Central bank in May announced the reduction of the policy rate from 23.5% to 22.5%. It is indicative of the rate at which the Central Bank lends to commercial banks.
Per the new rate, customers of banks envisage paying less on the loans they are servicing or intend taking from the banks. However, that is not the case and the Central bank believes the development is unfair to customers.
Announcing the directive Wednesday June 14, 2017 at the launch of the East Legon Branch of the Heritage bank, Head of Banking Supervision at the Central Bank, Raymond Amanfu said “we expect banks to respond favourably to the declining Monetary Policy rate and the Treasury bill rate.”
That, for him, will make “credit more affordable, help boost productivity and at the same time have a favourable effect on the non-performing loans structure of the bank.”