Monetary Policy Committee reduces prime rate to 18 per cent

Monetary Policy Committee reduces prime rate to 18 per cent

November 20, 2009
The move was motivated by signs of stabilisation in prices and strong performance of the cedi against major trading currencies.

"There are signs of stabilisation in prices and the foreign exchange market. Inflation is trending downwards and consumer price inflation has recorded four consecutive declines while core inflation is also on the decline," he said.

Mr. Amissah-Arthur, who is also Governor of the Central Bank, said indications were that inflation would continue to ease and fall within the upper part of the target range of 14.5 per cent to 17.5 per cent by the end of December 2009.

Mr. Amissah-Arthur said while policies were working to enhance the disinflation process and bring inflation within the target range over the medium term, there was the need to complement the process by stemming the slowdown in output growth appropriately positioning the policy rate.

This is supported by the slowdown in credit to the private sector, tightness in bank credit conditions and reflected in lower domestic Value Added Tax collections.

GNA