Economic analysts strongly anticipate the Bank of Ghana’s Policy Rate will be maintained as its Monetary Policy Committee meets to review the health of the Ghanaian economy.
During its last assessment of the risks in the economy in June, the MPC noted that risks to the inflation outlook were on the upside and outweighed the downside risks to growth.
“These were underscored by exchange rate depreciation, domestic financing of the fiscal deficit and energy subsidies. On the other hand, the weakening of both business and consumer confidence and tightening of credit stance on households and enterprises could pose downside risks to the growth outlook”, said a statement from the Bank.
The benchmark lending rate was therefore increased for the third successive time from 14.5 to 15 percent.
According to Deodat Adenutsi, an Economic analyst with the Department of Economics at the Central University College, the MPC has two options in setting the rate at the current meeting.
The Committee, he said, is likely to consider a downward review but thinks there would not be enough basis for the MPC to do that at this very time, hence the likelihood the maintain the current policy rate.
“This is drawn from the fact that the government is targeting an inflation rate of less than 10 percent at the end of the year and also the cedi has been performing relatively better in recent times against the major trading currencies; these are the things that they will consider in trying to fix the interest rates”, he projected.
The Bank seeks to achieve government’s inflation target by setting an interest rate and the interest paid on bank loans are adjusted based on the review of the policy rate.