The Bank of Ghana should not rush to increase the policy rate, says Mr. Mark Badu Aboagye, The Chief Executive Officer of the Ghana National Chamber of Commerce and Industry.
Mr. Mark Badu Aboagye sees such a situation as the same as using paracetamol to solving a stomach infection,”the pains will go down, but the issue will not go, and that is the experience we’re having now.”
His reaction comes shortly after the Governor of Bank of Ghana, Dr. Ernest Addison made the revelation that policy rates are to be increased soon.
In an interview with Bloomberg, he said “this week, the MPC will be meeting, I do not want to preempt what the Committee will decide but I think is a very complicated issue. As we said inflation is nearly 24%, we need to take a position on what to do with the current policy rate at 17%”.
The real sector will be affected if there should be the increment in policy rate. He suggested that inflation rate peaked could be misleading.
“For me in particular, I don’t see that. You see, when you have inflation and you’re able to identify that it’s from demand side, that you can easily use the monetary policy to deal with it that is immediate. But for supply side it takes much more longer time. “Now, I mean, there’s no food, I mean, food is short. Now if you want to grow even maize, it will take at least three months unless you’re importing. When you’re importing you’re importing inflation. So there should be a holistic approach, not only concentrating only on the monetary side otherwise you’ll be solving a stomach problem with paracetamol, the pains will go down, but the issue will not go, and that is the experience we’re having now,” he said.
