When financed such Government borrowing “crowds out” the private sector from accessing capital. It is often said that for “every cedi government borrows, the private sector has one cedi less”. But more importantly, the effect of excessive borrowing is to raise the cost of money. 11. Mr. Chairman, The interest rate policy setting process at the Bank of Ghana is very extensive.
The objective is to gain a comprehensive understanding of the state of the economy. 12. To do this, we assess developments in the external sector, the state of Government operations, the banking and financial sectors, the real sector through monitoring business and consumer confidence, and price conditions in the economy.