Monetary Policy Committee of the Bank of Ghana (BoG) has kept the policy rate unchanged at 16 per cent.
Speaking to the media at a news conference on Monday, the Governor of the Bank of Ghana, Dr Ernest Addison said the decision was as a result of some threats to the country’s economic growth and inflation outlook.
Dr Addison added that threats to inflation is broadly balanced hence the need to maintain the policy rate at 16 per cent
This is the fifth time this year that the Bank of Ghana has kept its rate unchanged; since January this year.
Possible impact of this move The Monetary Policy Rate is part of several tools that the Bank of Ghana uses to help control inflation or help meet its medium inflation target. The Bank’s monetary policy objective is to ensure price stability – low inflation – and subject to that, to support the government’s economic objectives including those for growth and employment. Price stability is defined by the government’s inflation target. This target is revised annually and spelt out clearly in the budget statement for each fiscal year. The objective recognizes the role of price stability in achieving economic stability more generally, and in providing the right conditions for sustainable growth in output and employment. For some analysts, this is more of “signal setting” or maybe clear signal that that Bank of Ghana is worried about future threats to the economy and inflation outlook. The three readings of inflation since the release of the rebased Consumer Price Index by the Ghana Statistical Service show that inflation has remained below its central path of 8 percent. Headline inflation declined from 7.8 percent in August 2019 to 7.6 percent in September, and has since inched up to 7.7 percent in October on the back of the recent upward adjustment in administrative prices of electricity and water. Looking ahead, inflation is projected to stay within the medium-term target of 8±2 percent over the forecast horizon. Inflation expectations for businesses, consumers, and the financial sector, appear to be well-anchored within single digits despite a slight pick-up in the Bank’s measure of core inflation. Impact on cost of credit The Policy Rate is seen as the rate at which the Bank of Ghana lends to commercial banks in the country. Therefore the decision to hold it at 16% could impact on the cost of credit in the coming months. Read the full BoG statement below: Bank of Ghana Governor and other developments on the economy The governor said the cedi's sharp depreciation has slowed over the past months. He added that the new measure will also help reduce the cost of credit for small businesses in the country. Dr Addison also announced reviewing compensation for bank management, board of directors and key management personnel.DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.
Latest Stories
-
T-bills: Interest rates increased for first time since January 1; government fails to meet target
22 mins -
Ghana retains 10th position with lowest fuel price in Africa
29 mins -
Will Ghana’s democracy stand the test of time in the 2024 elections?
4 hours -
Hindsight: Dreams fairytale run proved one thing; it is possible
5 hours -
God makes rulers, not you; you can’t choose your successor – Mahama to Akufo-Addo
6 hours -
Contributors own SSNIT, they must decide who becomes its Director-General – Austin Gamey
7 hours -
Move away from theory-based learning towards practical learning approaches – AUCC President to students
7 hours -
Haaland scores as Manchester City beat Nottingham Forest
8 hours -
Villas-Boas elected Porto president
8 hours -
Situation on frontline has worsened, Ukraine army chief says
8 hours -
US doctor describes witnessing starvation in northern Gaza
8 hours -
CAFCC: RS Berkane make final after USM Alger refused to play 2nd leg over Moroccans’ jersey
8 hours -
Elon Musk in China to discuss enabling full self driving
8 hours -
PSG clinch Ligue 1 title after Lyon’s win over Monaco
11 hours -
Guinness Ghana sets the pace at Ghana Beverage Awards with six awards
11 hours