The Trade Minister, Alan Kyerematen, is hopeful that lending rates in the country will go further down as government makes a conscious effort to reduce domestic borrowing.
According to him, the move is deliberate to ensure businesses get cheaper funds to invest into their operations.
The Central Bank has also revealed that lending rates have begun dropping marginally after the Policy Rate was cut by some 450 bases point this year.
Currently the policy rate stands at 21 percent. The industry average lending rates for loans and advances, as at the end of March, dropped to 26.7 percent from February’s rate of 26.9 percent.
Speaking at the SMEs CEO Summit, Mr. Kyerematen said more will be done to help SMEs get cheap funds.
“We are also aware that government’s proactive effort to reduce borrowing in the domestic market is going to be a major catalyst for reducing cost of capital. When government has a large appetite to borrow from the domestic market… it doesn’t only crowd out, the private sector banks also respond to that high appetite by increasing their interest rate,” he stated.