The Chief Executive Officer of the Ghana National Chamber of Commerce and Industry, Mark Badu Aboagye, says the Bank of Ghana should not rush to increase the policy rate.

According to him, doing so will be akin to solving a stomach infection with paracetamol, “the pains will go down, but the issue will not go, and that is the experience we’re having now.”

His comments are in reaction to an indication made by the Governor of the Bank of Ghana, Dr. Ernest Addison that policy rates may be increased soon.

In an interview with Bloomberg, he said “this week, the MPC will be meeting, I do not want to preempt what the Committee will decide but I think is a very complicated issue. As we said inflation is nearly 24%, we need to take a position on what to do with the current policy rate at 17%”.

In response, Mark Boadu Aboagye stated that an increment in the policy rate will have an effect on the real sector.

He also noted that the suggestion that inflation in the country has also peaked might be misleading.

“For me in particular, I don’t see that. You see, when you have inflation and you’re able to identify that it’s from demand side, that you can easily use the monetary policy to deal with it that is immediate. But for supply side it takes much more longer time.

“Now, I mean, there’s no food, I mean, food is short. Now if you want to grow even maize, it will take at least three months unless you’re importing. When you’re importing you’re importing inflation. So there should be a holistic approach, not only concentrating only on the monetary side otherwise you’ll be solving a stomach problem with paracetamol, the pains will go down, but the issue will not go, and that is the experience we’re having now,” he said.