BoG maintains monetary policy rate at 29% as inflation, exchange rate pressures persist

The Bank of Ghana has decided to keep the monetary policy rate at 29 percent following the conclusion of its 118th scheduled meeting last week.

Dr. Ernest Addison, the Central Bank Governor and Chairman of the Monetary Policy Committee (MPC), explained that this decision was based on the latest forecast showing a slightly elevated inflation profile due to recent exchange rate pressures and adjustments in transportation fares.

"However, the projections show that inflation will remain within the Monetary Policy Consultation clause of 13 to 17% by the end of the year. These forecasts are dependent on maintaining a tight monetary policy stance, including aggressive liquidity management operations," Dr. Addison explained at a press briefing in Accra on May 27, 2024.

"Taking these factors into consideration, the Committee has decided to maintain the policy rate at 29 percent," the BoG Governor added.

Dr. Addison stated that the Committee believed that while the implementation of policies at the macro and structural levels align well with the tenets of the IMF-supported program, there is a need to ensure that the recent depreciation of the Cedi does not influence business pricing behaviors and inflation expectations.

He emphasized that the strong build-up of about $2 billion since the beginning of Ghana's 17th IMF program, along with the disinflation process, progress on fiscal policy and consolidation measures, current account balances, and the external debt restructuring process, have all contributed to providing enough buffers to support the exchange rate.



MA