BoG increases Monetary Policy Rate to 24.5%

The Bank of Ghana has announced that it has increased the Monetary Policy Rate by 250 basis points.

This confirms that the central bank has increased Monetary Policy Rate to 24.5%.

The decision has been taken by the Bank of Ghana at the end of its Monetary Policy Committee (MPC) meeting this week.

“Inflation remains elevated and the balance of risks is on the upside.

“Although the forecasts are for monthly inflation to continue to slow down, the risks are on the upside, emanating largely from pass-through effects of the currency depreciation, the recent upward adjustment in utility tariffs, and rising inflation expectations. The Committee remains committed to re-anchoring inflation expectations and returning to a disinflation path.

“Under the circumstances, the MPC decided to increase the Monetary Policy Rate by 250 basis points to 24.5 percent,” parts of a release from the Bank of Ghana dated Thursday, October 6, has said.

Meanwhile, the Bank of Ghana notes that the outlook for the Ghana Cedi has improved, aided by the recent disbursement of the loan from Afreximbank of US$750 million, the signing of the syndicated Cocoa Loan of US$1.13 million, and the agreement with gold and oil companies to purchase the repatriated foreign exchange earnings of about US$83.9 million so far, will help stabilise the exchange rate.

The Monetary Policy Committee adds that it recognises the fact that the current condition is sub-optimal and will be interim until agreements are reached on an IMF-supported programme.

The Committee assesses that the engagement with IMF has been positive and that the early conclusion of the programme discussions will help re-anchor stability.

The next Monetary Policy Committee (MPC) meeting is scheduled for November 22-25, 2022.