The Association of Ghana Industries (AGI) has urged the central bank to review its strategy of an upward adjustment in the policy rate to check inflation.

AGI thinks that the approach has over the period failed to address the challenge with inflation currently standing at over 40 per cent despite consistent hikes in the policy rate.

The Greater Accra Regional Chairman of AGI, Tsonam Akpeloo, in an interview with Citinewsroom.com argued that the approach only crowds out the private sector from accessing critical resources to sustain their operations.

"We are just appealing to the central bank to consider the plight of the private sector and know that the more they increase, the more they crowd out the private sector, and the more we are unable to buy the loans that we need to be able to expand our production," he said.

He added that more sustainable alternatives must be adopted to protect the business community.

"AGI is extremely concerned about the continuous increase of policy rate to deal with inflation. This trend has been continuing for the past couple of months if not years and we believe that it's not yielding the desired result and so the central bank should discontinue that approach of using increasing policy rate as a mechanism of dealing with inflation," he said.

"As it is now, everybody knows that despite the increases we've seen in the policy rate, the inflation rate is still going up. So we can't continue to solve a problem that is not being solved with a measure that is not achieving the result we desire," he stressed.

The Bank of Ghana recently increased its policy rate by 2.5 percentage points to 27 per cent, citing risks to inflation and exchange rate concerns.

This implies that the cost of borrowing in the country is anticipated to increase further, however it will depend on the customer's risk profile. Customers with established credit may get slightly better rates than first-time borrowers or those who are viewed as being at risk.