Bank of Ghana keeps policy rate unchanged at 14.5%

The Governor of the Bank of Ghana, Dr Ernest Addison, has announced a decision by the Monetary Policy Committee (MPC) to keep its policy rate unchanged at 14.5 percent.

This comes after the Committee held a three-day deliberation to initiate proposals for the formulation of the monetary policies of the central bank.

Speaking at a press briefing on Monday, September 28, 2020, Governor of the Central Bank, Ernest Addison explained the decision was based on the drivers of economic growth returning to normal prospects for a good recovery.

“Consumers seem to be responding to the gradual lifting of restrictions which provides some scope for meaningful economic activities. Business confidence also increased, but yet to reach prelockdown levels,” the Governor explained.

He indicated, “About 95 percent of businesses surveyed showed strong optimism, reflecting the improving macroeconomic conditions, stability in the exchange rate, lower input prices, moderation in lending rates, and positive industry prospects.”

“Monetary and fiscal policies have been supportive providing the necessary underpinnings for the economy to withstand the negative output shock arising from the pandemic. Under these circumstances, the Committee's view is that the risks to the immediate outlook for inflation and growth are broadly balanced and decided to keep the policy rate unchanged at 14.5 percent,” Dr Addison stated.

Dr Ernest Addison added that inflation is projected to return to a medium term target by the second quarter of 2021.

Meanwhile, at its last 95th meeting in July this year, the central bank kept its monetary policy rate unchanged at 14.5 percent with the Governor of the Central bank, Dr. Ernest Addison attributing the verdict to disruptions in the economy triggered largely by the COVID-19 pandemic.