The Monetary Policy Committee of the Bank of Ghana has kept the Policy Rate unchanged at 14.5% for the fourth consecutive time.

This means lending rates will remain largely unchanged for the next three months. 

Speaking at a News Conference, Governor of the Bank of Ghana, Dr. Ernest Addison attributed some risks on the fiscal front to the unchanged policy rate.

"The key risks are the evolution of the budget deficit and the financing needs to support budget implementation and the uncertainty surrounding the pandemic."

As usual, many analysts and market watchers anticipated that the Central Bank’s base lending rate will be left at the same level.

They maintained that the potential upside risks to inflation during Christmas when there could be increased spending and the potential desire by retailers to take advantage of the demand to increase prices were some of the reasons.

The Governor had also hinted of a possible maintenance of the policy rate, saying, the monetary policy rate will respond accordingly to fiscal measures implemented to deal with the economic challenges.

Average lending rates of commercial banks have fallen by 1.8% to 21.26% since January this year. This comes as a good omen for businesses since few years ago cost of credit was high at about 31% on average.

Interest rates to remain stable

Interest rates on Treasury bills and other government securities have remained relatively stable for the past three months and is expected to remain unchanged going forward in the short term.

For instance, yield on the 91-day Treasury bill has remained relatively stable at 14.02% between August and October.

However, the interest rate on the 182-day T-Bill has hovered around 14.10% for the last three months.

Research arm of ratings agency, Fitch, earlier projected an ease in interest rates in the country, from early next year.