BoG increases Policy Rate to 27% as inflation continues to surge

Policy Rate has been increased to 27%.

This has been announced by the Chairman of the Monetary Policy Committee (MPC) and Governor of the Bank of Ghana (BoG) Dr. Ernest Addison.

In an address to the Monetary Policy Committee in Accra today, Monday, November 28, the Bank of Ghana Governor disclosed that inflation continues to go up.

He explained that the elevation of inflation is being driven by food pricing pressure and also the decline in the Cedi strength.

While consumer confidence dipped on account of rising inflation, the Central Bank has decided to hike Policy Rate.

Dr. Addison announced to the Committee, “The inflation forecast shows that in the outlook, inflation will likely peak in the first quarter of 2023 and settle at around 25% by the end of 2023. This forecast is conditioned on the continued maintenance of tight monetary policy stance and the deployment of tools to contain excess liquidity in the economy.

“There are however some risks to this forecast that would have to be monitored, including additional pressures from the proposed VAT increase, and exchange rate pressures. Continued vigilance to the evolution of these potential price pressures in the outlook will be key.”

The Governor of the Bank of Ghana added, “the Committee is of the view that significant upside risks to the inflation outlook remain. To continue to anchor inflation expectations, the Committee therefore decided to increase the policy rate by 250 basis points to 27.0%.”