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30.10.2007 General News

MPC Starts Meetings Tomorrow

The Monetary Policy Committee of the Bank of Ghana (BoG) will be meeting from tomorrow to review developments in the economy for the last quarter of the year.##[Read more]##

The committe, which is chaired by the Governor of the central bank, Dr Paul A. Acquah, will hold a press conference on Monday, November 5, after looking at the economic developments for the past three months and drawing projections for the remaining quarter of the year.

The meetings are being held at a time when the economy's robustness has been strengthened by the successful raising of $750 million from the international capital market through eurobond, and inflation has dropped further to 10.2 per cent at the end of September from the August figure of 10.4 per cent.

Domestic revenue mobilisation is also robust and on track to meeting the year-end target. So far, the revenues are only behind target by only 0.26 per cent as of the end of September.

The economy also witnessed the birth of the first offshore banking facility, which became the launching pad to the country's operation of the International Financial Services Centre (IFSC).

The prices of the country's major commodities, gold and cocoa, have also seen apppreciations on the international market, although crude oil prices, to which the economy is largely exposed, has been recording outrageous price hikes, reaching $90 last week.

According to the First Deputy Governor, Dr Mahamadu Bawumia, the $750 million from the eurobond could be leveraged within the 10-year period it would be in issue to derive value equivalent to $5 billion.

This means that in the long term, the economy would maintain its robustness and resilience to shocks, internally or externally.

Last month, the country also ended its year long electricity load management programme ocassioned by a higher demand and which adversely affected industry.

Industries are either finding their level on their production or are preparing to get there.

The cedi has also maintained a relative stability against major trading currencies after the re-denomination exercise, while the banking sector continues to witness stiff competition.

With December just around the corner, when expenditure from all the economic actors — government, households and the private sector — are expected to be high, the BoG is not likely to pursue an expansionary economic policy that will release more cash into circulation.

It is expected that the prime rate, which partly determines at what rate the banks lend to borrowers and which currently stands at 12.5 per cent, be maintained till the rest of the year.

The banks use the prime rate of the central bank as well as the risks inherent in the economy as a benchmark to fix their lending rates.

From The Business Desk