BoG maintains policy rate at 14.5%

The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has maintained the policy rate at 14.5 percent.

Governor of the Bank of Ghana Dr Ernest Addison said at the MPC press conference in Accra on Monday, November 23 that “The Committee noted that inflation has eased following the spike to 11.4 percent. At 10.1 percent for October 2020, inflation is almost at the upper band target.

“The fiscal and monetary policy measures, which have increased liquidity in the economy, appear not to be impacting inflation, partly due to the existence of the output gap. As a result, the Committee expects these conditions to support inflation to return to its central path by the second quarter of 2021.

“To conclude, the Committee noted that macroeconomic conditions have generally improved relative to conditions at the time of the last MPC meeting in September 2020.

“Global conditions continue to be supportive, domestic inflation is easing, growth prospects are improving, crude oil prices have stabilized, monetary aggregates have expanded but with minimal impact on inflation, the current account deficit is stable, remittances inflow has remained firm, the exchange rate has been stable and reserve buffers continue to remain strong.

“The key risks are the evolution of the budget deficit and the financing needs to support budget implementation and the uncertainty surrounding the pandemic,” he said.

He added that “Under the circumstances, the Committee decided to maintain the policy rate at 14.5 percent.”