Deputy Minister for Commerce and Business, Dr. Stephen Amoah has raised considerations concerning the potential unfavourable affect of extreme rate of interest hikes on commerce and trade, notably in mild of the persistent inflationary pressures skilled within the nation.
Dr. Amoah urged policymakers to train warning when adjusting rates of interest, as their technique might inadvertently worsen the objective of lowering inflation.
Addressing an viewers of economists, policymakers, and trade consultants on the 2023 Monetary and Economics Seminar, Dr. Amoah highlighted the necessity for a nuanced method to financial coverage, considering the underlying causes of inflation.
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Drawing consideration to the cost-push components driving inflation in Ghana, he emphasised the pivotal position of rates of interest in the fee construction of companies, given the restricted availability of fairness financing within the nation.
“By repeatedly growing rates of interest in an try to curb inflation, we threat exacerbating the challenges confronted by commerce and trade,” cautioned Dr. Amoah.
“If the rising price of enterprise, which is among the primary contributors to inflation, is already straining the sector, additional rate of interest hikes might inadvertently hamper development and productiveness.”
The Deputy Minister burdened {that a} holistic understanding of the macroeconomic panorama is important to successfully fight inflation.
Whereas acknowledging the significance of managing inflationary pressures, Dr. Amoah advocated for a balanced method that considers the potential antagonistic results on commerce and trade.
