Policy rate hike: How can we compete with countries with lower interest rates in AfCFTA? - AGI

The Association of Ghana Industries (AGI) has bemoaned the rate at which the central bank has hiked the monetary policy rate from 19% to 22%.

According to the Chairman of the Greater Accra Regional branch of AGI, Tsonam Akpeloo, already, traders are paying huge sums of monies as interests on the loans acquired from financial institutions, therefore, this further increment

Read full articlein the monetary policy will cause more harm than good to traders.

He further wondered how Ghanaian businesses can compete with other countries with lower interest rates in the African Continental Free Trade Area (AfCFTA).

Mr Akpeloo said inasmuch as local businesses appreciate that the increase of the monetary policy rate by 300 basis points by the central bank is a way to salvage the high inflation rate as well as stabilize the local currency, that is not the best way to solve the problems.

Speaking on Citi TV's Big Issue programme on Saturday, August 20 and monitored by GhanaWeb, he said, “Prior to the recent increase in the policy rate, there was another not long ago. We are yet to find out what benefit this brought to the country. Going ahead to increase the policy rate again, without telling us the results the previous one achieved, is not fair to us.”

“Already we are borrowing at an extremely high rate. In this era of continental free trade, we are expected to be competing with countries that have lower interest rates. That is really insensitive to our plights. Inasmuch as we appreciate that the central bank finds a need to solve the situation, this is not the best way to go about it,” he added.

The local currency - Cedi - has in the past week witnessed a decline in value against major trading currencies, Pounds Sterling, US Dollars and Euros.

On the interbank forex rates from the Bank of Ghana, the Cedi is currently trading against the dollar at a buying price of GH¢8.14pesewas and selling at GH¢8.1532.

At some forex bureaus, the Cedi is currently trading against the dollar at a buying price of GH¢9.97 pesewas and selling at GH¢10.17pesewas.

Against the Pounds Sterling, the Cedi is bought at GH¢11.50 and sold at GH¢12.13.

Meanwhile, the Bank of Ghana (BoG), on the other hand, has entreated Ghanaians to remain calm as it implements pragmatic measures to resolve the cedi depreciation against major trading currencies, especially the US Dollar.

As part of the measures, the central bank said it was increasing foreign currency (FX) supplies to banks in the short term to help meet growing FX demands for external payments.



ESA/WA