The Governor of the Bank of Ghana says the hike in the policy rate to 26 percent will in the medium term prove beneficial to the country’s economy.

Contrary to opinions by sections of the business community that the hike will impact negatively on credit extension, Dr Kofi Wampah said the economy will benefit richly.

He was speaking at a press conference held in Accra, Monday.

As part of measures under the IMF program, the Bank of Ghana is required to reduce its lending to the government to zero from next year.

The governor has indicated that the law to give the legal backing, should be in place by the first quarter of 2016.

Dr. Wampah also indicated that he will soon take action on a recent audit which showed an undesirable financial position by some commercial banks.

“We are starting from a regime to a new regime. It’s a way of doing things and if there are problems what we do is to sit with the banks and ask them to devise an action plan that will allow them to move from their current position to where desirable,” he said.

The Bank of Ghana is optimistic a new banking law, which should come into force from next year will help bring some sanity into banking sector and micro finance industry.

He was hopeful the law will also address some of the current issues with firms like DKM.

Dr Kofi Wampah said that government was on track in stabilizing the economy looking at measures implemented so far.

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