A Financial Analyst Nii Yarboi Annan believes the new policy rate of 17% would not attain the objective for which it was set by the monetary policy committee (MPC) of the Bank of Ghana.
He is of the opinion that the new rate should have been at least 19% in order to “stabilize the capital market and equally accommodate rising inflation”
According to Nii Yarboi Annan the 17% policy rate would only succeed in discouraging lenders who want intended to pull out of the bond market or their savings to prevent further erosion of the value of their monies.
The Central Bank has been forced to find dollars to pay of several foreign and local investors who decided to pull out of government securities in the wake of the depreciation of the cedi.
Member of Parliament for Bolgatanga Central Isaac Adongo says the 17% policy rate is 6 months late and should have been announced in September 2021.
Financial Analyst Nii Yarboi Annan tells Radio Gold the 17% would not be enough compensation for savings because the headline inflation was 15.7%
“If current headline inflation is 15.7% and monetary policy rate of 17% what this means if discounted by the banks on the 91 day TBill by 1%, the rate on the secondary market will be 16%.
This is not enough compensation with the current environment with inflation at 15.7%,” he argues.
Nii Yarboi Annan says “if the current surge does not flatten, we ought to go back and change the MPR again which doesn’t repose confidence.”
Nii Yarboi Annan explained his stance in an earlier interview with Sena Nombo on the Gold Power Drive