The monetary policy rate may remain high for some time because of the risks to the inflation outlook.

According to GCB Capital, the substantial risks to the inflation outlook could keep the monetary policy tighter for a bit longer.

“We now expect the Monetary Policy Committee to defer its first interest rate action to the May 2024 policy window, particularly as inflation is expected to reverse course in the March 2024 data window”, he mentioned.

“Accordingly, we see up to three interest rate cuts in 2024 to around 26% as the Central Bank balances the risks to inflation and growth”, it added.

It continued that treasury bill yields should also continue the steady decline through the first quarter of 2024.

This is also due to the anticipated inflows from multilateral partners for budgetary support expected to ease the immediate appetite for short-term borrowing and usher in an aggressive yield compression strategy.

The Monetary Policy Committee of the Bank of Ghana kept its policy rate unchanged at 30% for the second consecutive time in November 2023.

The decision was based on core inflation measures trending downwards with the disinflation path expected to ease