BoG MPC to hold third meeting of 2022 to review economic developments

Dr Ernest Addison 480x430 1121212 Governor of the Bank of Ghana, Dr. Ernest Addison and Chairman of the MPC

Mon, 9 May 2022 Source: www.ghanaweb.com

BoG announced raft measures to deal with inflation after March MPC meetings

Monetary Policy Rate hiked from 14.5% to 17%

Capital Adequacy Ratio increased to 13%

The Bank of Ghana’s Monetary Policy Committee is expected to commence its 106th and third meeting of this year in a bid to review economic developments in the country.

According to a circular issued by the central bank, the scheduled meetings will take place from Wednesday, May 18 to Friday May 20.

The central bank will subsequently update the press on its decisions on May 23, 2022.

Governor of the Bank of Ghana, Dr. Ernest Addison, who is also Chairperson of the Monetary Policy Committee, is expected to make decisions that will influence the cost of credit in the country for the next three months of the year.

It will also entail the initiation of proposals for the formulation of the central banks’ policies, provision of statistical data and economic advice.

Meanwhile, at its 105th MPC meeting, Dr Ernest Addison announced a hike in the monetary policy rate to 17 percent from an earlier 14.5 percent to deal with the current economic conditions which include fiscal pressures, inflation, exchange rate volatility among others.

“Revenue performance has been slow to align with projections, while expenditure remains rigidly downward, despite the strong efforts to cut expenditure by 20 percent as announced by government. The above have resulted in financing constraints which will have to be resolved very swiftly to ensure the announced fiscal consolidation path is achieved.

The MPC is however confident that ongoing discussions will lead to very decisive policy reforms which will address underlying fiscal mismatches and restore some calm in the markets. This, together with the monetary policy decision and additional measures, should help re-anchor inflation expectations. Under these circumstances, the Committee has decided to increase the policy rate by 250 basis points to 17 percent,” the Governor explained.

In addition to the policy rate hike, the Central Bank MPC announced that with effect from April this year, the Capital Adequacy Ratio (CAR) regulatory requirement for banks will be increased to 13 percent from an initial 10 percent.

This represents a 300-basis point adjustment in the CAR requirement for banks operating in the country.

Source: www.ghanaweb.com
Related Articles: