Financial experts predict policy rate to exceed inflation

The chief financial officer of Valley View university, Dr Williams Peprah says the Central Bank’s base lending rate since 2021 has been higher than the inflation rate.

In February, the inflation rate was 15.7% before the Bank forecasted on 21st March that the Central Bank’s lending will range within 15.8% and 19.2%

According to Dr Peprah, the average between the two rates for the past years has been 3.5%

The inflation rate was 15.7% in February and it was anticipated the MPC rate for the coming quarter should be set at a range of 15.8% to 19.2% which means an estimated 130 to 470 basis points increase in the MPC rate for March 2022.

He explained that it is projected that 200 basis points may be added to increase the MPC rate from 14.5% for the March 2022 outcome.

“Should BoG try to address the free fall of the Ghana cedi against the foreign currencies then an MPC rate must be set at 19.2%,” he said.

He stated that this will increase interest rates and make government securities attractive and prevent stocking of foreign currency as an investment.

Bainatv.com.gh/Ayinawu Alhassan

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