The Bank of Ghana’s (BoG) Monetary Policy Committee (MPC) has lowered the policy rate from 30% to 29%.
The rate at which Ghana’s central bank lends to commercial banks is known as the policy rate. The MPC kept the Bank of Ghana’s (BoG) policy rate at 30% in November of last year.
Ernest Addison, the governor of the Bank of Ghana, attributed the committee’s decision to the consistent decrease in headline inflation during a press conference on Monday, January 29.
The disinflation process is predicted to continue, he said, with headline inflation falling to between 13% and 17% by the end of 2024 and then gradually returning to the medium-term target range of 6% to 10% by 2025.
There are upside risks to the inflation outlook, notwithstanding these projections. Strict adherence to the 2024 budget and tight monetary policy are necessary to sustain the disinflation process.
“The committee acknowledged that there has been some recovery, but it thinks that a strong stance on policy is necessary to maintain the progress made in deflation. According to Addison, the committee decided to reduce the monetary policy rate to 29%, or a 100 basis point drop, in light of these circumstances.
