Policy rate decision takes time to reflect in lower lending rates – BoG

The seminar brought together banking professionals to examine the implications of the latest MPC decision and discuss measures to improve monetary policy transmission and support sustainable credit growth.

He explained that the effectiveness of monetary policy should not be measured solely by changes in the benchmark rate but by its impact on lending and deposit rates, credit availability, investment, consumption, employment and broader economic activity.

The Bank of Ghana (BoG) has cautioned that reductions in the monetary policy rate do not automatically translate into lower lending rates, stressing that the effectiveness of monetary policy depends largely on how decisions are transmitted through the banking system to businesses and households.