The monetary Policy committee (MPC) of the Bank of Ghana has cut the prime rate by 200 basis points to 16 percent. This is the biggest cut in a long while. The prime rate informs the interest rate the banks charge on loans. Central Bank governor Kwesi Amissah Arthur has asked the commercial banks to respond appropriately and reduce their lending rates to ensure growth to productive sectors as well as the private sector.
Mr. Amissah Arthur told journalists the cut was the result of improvement in the economy in the past three months, adding, business confidence has also improved substantially. Borrowers waited with baited breath for the announcement and how it would affect the interests they would pay on their loans.
Experts say all indicators pointed to a drop in the rate � reducing inflation, interest on government securities and others. Some banks had already begun to respond to the trend by reducing their rates; Zenith Bank, Unibank, Sahel Sahara, Barclays Bank and now Standard Chartered Bank which says its base rate effective 1 March 2010 is 25.5 percent
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