Four out of six members of the Monetary Policy Committee voted for 150 basis points cut in the policy rate to 14.0%.

This was captured in the Monetary Policy Committee (MPC) decision report submitted by the Bank of Ghana.

However, one of the members voted for a 75 basis points cut, while the other member wanted the rate to be kept unchanged at 15%

Reasons

The majority of the members were worried about the impact of the developments in the Middle East and its impact on the economy, especially inflation.  For instance, according to the submission made by one member of the MPC, there are some key downside risks to the forecast with respect to inflation due to the recent surge in international crude oil prices and their transmission to domestic ex-pump petroleum prices.

 “This could, however, be moderated by continued commitment to fiscal discipline, relatively tight monetary policy, and exchange rate stability”, the member added.

Another member, however,  was worried about the broader impact of developments in the Middle East on the economy - inflation, growth, utility tariffs and cost of credit.

The member noted that “The case for cutting is strong at this MPC round, but material upside risks to inflation warrant a calibrated, rather than aggressive”.

However, there was some broad consensus among the members.