BOG Increases Monetary Policy Rate To 29.5 Percent

The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has increased the Monetary Policy Rate by 150 basis points to 29.5 percent. The prime rate, which is of keen interest to businesses, signals the rate at which the Central Bank will lend to commercial banks. It also subsequently influences average lending rates on loans to individuals and businesses.

In his address to the media, Governor of the Central Bank, Dr. Ernest Addison, cited likely risks to the inflation outlook despite the recent moderation and deceleration of inflationary pressures, the marginal stabilisation of the local currency, and near-term forecasts.

This will be critical in resetting the economy on the path of recovery and sustaining growth. Headline inflation has declined marginally for two consecutive times but continues to remain relatively high compared to the medium-term target of 8+ or -2 percent. To place the economy firmly on the part of stability, it is important that the Bank of Ghana increases the Monetary Policy rate.