BoG's MPC to announce policy rate decision today

The Monetary Policy Committee (MPC) of the Bank of Ghana is expected to today, March 22, announce its decision taken on the policy rate.

The much anticpated announcement will come after the MPC held it's second meeting of the year from Wednesday, March 17 to Friday March 19, 2021.

For the meeting, the Monetary Policy Committee of the central bank initiated proposals for the formulation of the policies, provided statistical data, advice and a review of economic developments for the country.

At the MPC’s last meeting in January 2021, the central bank kept its monetary policy rate unchanged at 14.5 percent.

BoG governor, Dr Ernest Addison explained the decision was based on growth indicators rebounding and headline inflation returning to target in the second quarter of 2021.

“In the domestic economy, growth has picked up since the sharp contraction in the second quarter of 2020. All the high frequency indicators of economic activity have rebounded, consumer and business confidence levels are back at pre-lockdown levels, and there are indications of steady growth in private sector credit,” the governor earlier said.

“However, the Central Bank projects headline inflation to return to target in the second quarter of 2021. Risks to inflation in the near-term are broadly contained, but short to medium-term risks emanating from the fiscal expansion and rising crude oil prices are emerging. Under the circumstances, and given the balance of risks to inflation and growth, the Committee decided to keep the policy rate at 14.5 percent,” he added.

Dr Addison however cautioned that a threat of a second wave of the coronavirus pandemic has heightened uncertainty and could hamper economic recovery process in the near term.

The policy rate is of key interest to businesses operating in the country as it influences the interest rate on loans and determines the rate at which the central bank lends to commercial banks.