FLASHBACK: BoG responds to Togbe Afede XIV's high interest rate comment

The Bank of Ghana responded to issues raised by Togbe Afede over the structure of its monetary policy rate.

“More recently, the current Management of the Bank of Ghana has worked very closely with other key stakeholders to achieve significant stability in the last four (4) years. Inflation which was 15.4 percent at the end of 2016 was brought down significantly to 7.9 percent in 2019, until the disinflation process was dislodged with the onset of the covid pandemic, which saw inflation rising again in 2020 and currently estimated at 12.2 percent at the end of November 2021," the bank said in a statement.

Read the full story originally published on December 21, 2021, by 3news

The Bank of Ghana (BoG) has responded to a comment by Volta regional House of Chief, Togbe Afede XIV who is also an astute businessman in Ghana, to the effect that the interest rate in Ghana is high.

The central bank indicated that Togbe Afede XIV is reported to have raised several issues about the Bank of Ghana’s conduct of monetary policy and its governance structure.

While they rarely comment on general media discussions with the understanding that different stakeholders will have different views on the conduct of monetary policy, and also has a strong commitment not to be distracted by such discussions but rather remain focused on its primary mandate of controlling inflation, the BoG said it found it very important to respond to the claims by made by the revered traditional ruler.

A statement issued by the head of Research at the BoG said “To begin addressing the issues he raised, we will put in perspective where we have come from as far as macroeconomic management is concerned. Achieving and maintaining macroeconomic stability has been one of the major challenges to public policymaking in Ghana. Its evolution is intertwined with the development history of Ghana.

“More recently, the current Management of the Bank of Ghana has worked very closely with other key stakeholders to achieve significant stability in the last four (4) years. Inflation which was 15.4 percent at the end of 2016 was brought down significantly to 7.9 percent in 2019, until the disinflation process was dislodged with the onset of the covid pandemic, which saw inflation rising again in 2020 and currently estimated at 12.2 percent at the end of November 2021.

The gains from this disinflation process have been passed on to the market as the Central Bank reduced the Monetary Policy Rate, which stood at 25.5 percent at the end of 2016 to 13.5 percent at September 2021, and lending rates have dropped from 28.1 percent at the end of 2016 to 20.2 percent at the end of September 2021.