The Monetary Policy Committee of the Bank of Ghana has maintained the policy rate for the second successive time. It left the benchmark lending rate unchanged at 13.5 percent.The policy rate is usually indicated of the rate commercial banks can borrow from the central bank. The rate is important because it can influence interest rates and ultimately the deductions that are made from your salary to settle any loans you may be servicing.Joy Business’ George Wiafe who was at the MPC briefing reports that announcing the rate at a news conference earlier the Governor of the Bank of Ghana Kwesi Amissah Arthur explained that its decision to keep the rate unchanged was influenced by fears of government’s indebtedness to contractors as well as wage arrears.The MPC noted that interactions with consumers and businesses in its regular survey for October showed signs of optimism, with businesses excited about capital expenditures but were less optimistic about employment prospects.On the banking front there was some good news as the sector appears to be increasing credit to small businesses and reducing the loans that have gone bad. The banks’ ability to withstand losses also showed some improvement.The country’s gross international reserves also went up substantially by 1.3 billion dollars to 4.4 billion dollars at the end of November. This translates into 3.5 months of import cover for goods and services.This was as a result of a favorable balance of payment. The Governor concluded with the optimism that inflation will end the year around 9.5 percent.Meanwhile reactions have started pouring in from economists and the business community. Executive Director of the Center for Policy Analysis Dr. Joe Abbey says under the circumstances, the MPC could not have done otherwise.The AGI’s recently released Business Barometer Index ranks high cost of credit as the major challenge to doing business, and so the group has always wanted to see a reduction in the rate.Another group, the Private Enterprises Foundation says although maintaining the rate is a prudent step, the Bank of Ghana should ensure that earlier reductions reflect in the lending rates of commercial banks.Source: Joy Business/Ghana