Analysts say Bank of Ghana Policy Rate Cut must reflect in lending to real sector
Financial sector stakeholders have urged that the recent policy rate cut by the Bank of Ghana must translate into lower lending rates for businesses and households in the real sector. Economists argue that while monetary policy easing is a step in the right direction to stimulate economic activity reducing the cost of borrowing remains critical to driving investment production and job creation.
The Bank of Ghana has adjusted its policy rate as part of broader measures aimed at boosting economic performance and tackling inflationary pressures. Reduction in the benchmark interest rate is generally expected to lower commercial lending rates and encourage borrowing for productive purposes.
However some industry players say the impact has not yet been fully passed on to the private sector. They contend that persistently high lending rates hinder small and medium enterprises from accessing credit and limit opportunities for expansion. In particular businesses in agriculture manufacturing and services cite cost of credit as a major barrier to growth.
Financial analysts say commercial banks often cite risk profiles inflation concerns and non performing loan portfolios as reasons for cautious pricing of lending products. They recommend supportive regulatory measures and enhanced risk sharing frameworks to encourage banks to adjust interest rates more responsively.
Small business owners say that lower borrowing costs would allow them to invest in equipment hire more staff and expand their market reach. They also argue that affordable credit is essential for innovation competitiveness and resilience as the economy recovers from recent global disruptions.
Consumer groups have added their voices calling for transparency in how financial institutions respond to policy rate changes. They want clear reporting on lending rate adjustments so that borrowers are fully informed about how changes in monetary policy affect loan pricing.
Bank of Ghana officials have acknowledged that transmission of policy rate changes to the real sector can take time and depend on multiple factors including market conditions and global economic trends. They reiterate that sustained collaboration between the central bank and commercial lenders is necessary to ensure that monetary policy objectives are effectively realised.
As discussions continue policymakers are expected to monitor lending practices closely and consider additional tools to support efficient credit flow. Lowering the cost of credit remains central to stimulating investment boosting production and improving living standards across the country.
