Business News of 2014-02-06

BoG increases policy rate from 16 to 18%

The Monetary Policy Committee of the Central Bank has increased the policy rate by 200 bases points.

The two percent increment from 16 to 18 was arrived at after an emergency meeting at the Bank on Thursday.

The Policy rate is usually indicates the rate at which commercial banks can borrow from the Central Bank. It also has a domino effect on interest rates.

Among the reasons cited by the Governor of the Bank of Ghana for increasing the rate by 2% are weakening of some global economies which has resulted in a constriction of capital inflow, as well as domestic fiscal pressures such as exchange rate fluctuations and price volatility.

XYZ Business Editor Charles Nixon Yeboah also said the MPC also cited a likely reduction in expected revenue from gold and cocoa as part of the reasons.