Bank of Ghana maintains monetary policy rate at 14.5 percent

The Monetary Policy Committee of the Central Bank has kept its policy rate unchanged at 14.5 percent following a sudden rise in inflation, the Governor of the Bank of Ghana (BoG), Dr Ernest Addison has said.

This follows an earlier March 2020 meeting which saw a 150-basis-point reduction in the monetary policy rate to 14.5 percent, with some commercial banks impressed upon to further slash on lending rates to ease access to credit.

Speaking at a press briefing on Friday, May 15 at the central bank, Dr Ernest Addison said; "On the growth outlook, baseline projections show a sharp downturn in GDP growth with the economy operating below capacity in the medium-term. Under the circumstances and given the balance of risks to inflation and growth, the Committee decided to keep the policy rate unchanged at 14.5 percent."

The Governor added the bank’s latest forecast points to elevated risks to the inflation outlook in the forecast horizon, underscored by the recent jump in headline inflation.

"On the downside, relief measures on water and electricity tariffs and declining crude oil prices are likely to ease price pressures in the outlook," he concluded.

Meanwhile, recent figures released by the Ghana Statistical Service (GSS) indicated last month’s inflation climbed to 10.6 percent from 7.8 percent the previous month.

The April inflation however is the highest in two years and takes inflation beyond the BoG’s medium target of 8+ or minus 2 percent.