Policy rate increases to 28%; cost of loans to surge

The Monetary Policy Rate of the Bank of Ghana has increased its policy rate – the rate at which it lends to commercial banks – by 100 basis points to 28%.

Within a year, the rate has gone up by a staggering 13.5%

The Central Bank cited downside risk to inflation and exchange rate depreciation as the major reason.

This means cost of loans will go up further and will consequently worsen the cost of doing business within the country.

Already, average lending rates have shot up sharply to 35.58% in December 2022, from 33.87% recorded in November 2022.

This is equivalent to 2.82% interest rate on loans per month.

According to the January 2023 Summary of Economic and Financial Data, average lending rates have been increasing sharply since a year ago.

In actual fact, it has gone up by 15.42% since January 2022.

More soon………………………

Source: Ghana News