The Monetary Policy Committee is expected to hold the policy rate at 29.50%.

According to GCB Capital, this will be in support of growth and economic activity as it expects the disinflation process to resume in July 2023.

The steady policy rate will mean lending rates will largely remain the same for the next two and half months.

The Monetary Policy Committee of the Bank of Ghana is expected to begin its quarterly meeting on Tuesday, July 18, 2023, to Friday, July 21, 2023, to review developments in the economy. The meetings will conclude with a press conference on Monday, July 24, 2023, to announce the decision of the Committee.

GCB Capital said despite inflation increasing cumulatively by 130 basis points over the last two months and the unyielding food inflation which remains a concern, it maintains that the reversal is temporary.

“Core inflation appears broadly contained, and the balance of risks weighs more heavily on near-term growth than inflation amidst the stringent austerity environment”, it explained.

“Additionally, interbank cedi liquidity levels are beginning to tighten, as reflected in the marginal increases in the interbank interest rate over the last five weeks”, it furthered.

The Central Bank in May 2023 maintained its key interest rate at 29.5% as inflation continues to decline, citing tight monetary policy and stable currency rates as contributing factors.

“The Committee further noted the significant decline in headline inflation from the beginning of the year of more than 12.0 percent. The percentage of items in the CPI basket with inflation of more than 50 percent and above is receding, an indication of a strong return to the disinflation path. This is also supported by core inflation, which is also easing at a fast pace”, it said.

“The tight monetary policy through additional liquidity management operations to address excess liquidity conditions in the market, relative stability in the local currency, and easing of ex-pump petroleum prices have supported the disinflation process".

"Furthermore, the Bank of Ghana has signed the Memorandum of Understanding on zero financing to the budget to eliminate fiscal dominance and allow for a faster ease in inflation towards the target band. These policies should provide the much-needed anchor to reinforce the disinflation process and reset the economy on the path of recovery”, it added.