BizTech: A breakdown of monetary policy decisions since the start of 2022

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Fri, 27 May 2022 Source: www.ghanaweb.com

The Monetary Policy Committee of the Bank of Ghana decided to maintain its policy rate at 14.5 percent after it held its first meeting of the year to review economic developments.

The rate had been kept at 14.5% as inflation stayed in the single digits in 2021 even after the devastating effects of the COVID-19 pandemic on the economy.

The Monetary Policy rate is of keen interest to businesses since it signals the rate at which the Central Bank will lend to commercial banks and also influences average lending rates on loans to individuals and businesses.

But in March this year inflation shot up to 19.4% causing the Bank of Ghana to adjust the monetary policy rate to 17%.

The move which came as a major shock to many was rather necessary to deal with the current economic situation in the country.

Meanwhile, economists and analysts had backed the BoG’s decision as they asserted this will help boost investor confidence and shore up investments in the country.

Inflation, tight fiscal policy, and the country’s rising debt stock pushed inflation to 23.6% in April causing the MPC to increase the policy rate by 200 basis points to 19 percent.

The hike in the policy rate was to tame the unprecedented rise in prices of goods and services.

Governor of the Bank of Ghana, Dr. Ernest Addison, explained that this will impact lending but was necessary to stem the soaring inflation figures.

In this week’s edition of BizTech, we bring you the breakdown of the monetary policy rate and its impact on the economy.

Source: www.ghanaweb.com
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