Economist calls for shift from interest-rate to credit-focused monetary policy

6, GNA – Dr Adamu Braimah Abille, Policy Analyst at the Integrated Social Development Centre (ISODEC), has urged the Bank of Ghana (BoG) to shift its monetary policy focus from interest rates to the quantity, quality and allocation of credit to drive economic activity and control inflation.

Presenting on monetary policy and banking, he identified three key assumptions requiring review: the role of banks as financial intermediaries, the relationship between interest rates and economic growth, and the quantity theory of money.

He said conventional assumptions underpinning monetary policy, including the belief that banks merely intermediated existing money and that higher interest rates effectively controlled inflation and economic activity, required closer scrutiny.