A Senior Finance Lecturer at the University of Ghana Business School, Dr. Benjamin Amoah, has indicated that businesses will not be affected severely by the increase in the policy rate.

The Monetary Policy Committee of the Bank of Ghana on Monday, July 24, 2023, increased its key lending rate by 50 basis points to 30%.

Dr. Amoah believes the marginal increase would rather help in controlling inflation.

Speaking to Joy Business, Dr. Amoah was optimistic the move by the Central Bank is to consistently check the inflationary pressures within the economy.

"The Central Bank considered all factors and arrived at the 50 basis point increase. In this case, I'm sure they realised the need to increase it a bit looking at the inflation rate we saw last month".

"Its impact on businesses is going to be marginal, businesses will not necessarily increase prices because of a 50 basis point in policy rate. I don't think banks will also quickly increase their lending rate. It will have a slight impact but not as huge as the 150 or 200 basis point", he mentioned.

Dr. Amoah also called on banks to support economic recovery of the various sectors to ensure growth.

"The banks returning to profitability is due to the DDEP.  So now that we are gradually getting out of the programme, we expect something positive but the problem is the disconnection between the banks and other sectors".

"How it translates into other sectors of the economy is the problem because if the banks are the only ones making profits then it's bad. We need to see how best we can address that to support all the other sectors of Ghana's economy", he added.