Banks pressured to reduce interest on loans as policy rate drops

Stakeholders and industry players have impressed on banks to ensure quick implementation of the reduction in the policy rate to 23.5 percent.

According to these stakeholders the reduction is a significant one which should reflect in no time. The governor of the bank of Ghana Dr Abdul Nashiru Issahaku cited the country’s declining inflation, seeming cedi stability and improved inflation, factors for the reaction. The reduction which is the biggest in 10 years represents a 200 basis point reduction.

3FM Business has been speaking to various industry players on this development According to the president of Ghana Union of Traders Association, Dr. Barima Ameyaw, the business community should see the reduction reflecting on loans they acquire. “This is a significant reduction which should reflect in no time. It is a pleasant reduction and we look forward to seeing its impact on our loans”, he said.

Executive secretary of the Importers and Exporters Association, Sampson Ashaki Awingobit, has impressed on banks to ensure this reflects in loans shortly, “We will plead with the banks to effectively effect this change in the loans. It should reflect quickly so we can also have some relief in our cost of doing business” he said.

Economist Kinsley Martey, however said it may take a little longer to reflect. “Normally, when the policy committee reduces the rate, a takes a while before it is implemented, like a space of 6 months. Because the banks will also have to do some balances, and books checking, so we will have to wait for a while”, he added.