When inaugurating the new Bank of Ghana Board on August 20, the President expressed concern about the high lending rates in the country and the negative impact on growth. He called out the Board to address the problem as a matter of urgency. The Governor pledged the Board’s commitment to take the necessary steps to address the issue. We wish to recall that prior to 1983, interest rates—both lending and deposit rates—were controlled—literally fixed—by the monetary and regulatory authority (MRA). This kept lending rates contained. In 1983, Ghana adopted wide-ranging liberal economic policies under an Economic Recovery Programme (ERP). Interest rates were deregulated as part of the new liberal policies. Since then, lending rates, along with other nominal price-variables, began to assume their “true” levels.
