The Impact of Monetary and Fiscal Policies on the Lending Rates of Commercial Banks in Ghana.

Abstract

The study set out to examine the effect of monetary policy and fiscal policy on the lending rates of commercial banks in Ghana. The study used secondary data acquired from the Central Banks quarterly report spanning starting 2004 - 2018. Time series data analysis was used. The study found that monetary policy had a significant positive effect on the lending rates of commercial banks. Government expenditure had insignificant effect on the lending rate and lastly inflation also had a positive but insignificant relationship with lending rate. Based on the findings, the study recommends that, monetary policy should continue to be the major tool to control the cost of borrowing