Ernest Addison, Governor of BoG
The Bank of Ghana (BoG) has maintained its policy rate at 16% even though inflation inched up to 9.5% in April, the highest in the last six months.
A surprise policy rate cut to 16% in January resulted in a sharp depreciation of the Ghana Cedi against the US Dollar, which has eased in the last few months.
Even though April’s inflation rate falls within the government’s target band of 6 to 10%, the central bank has adopted a wait-and-see approach, as it announced the hold on Monday, 27 May 2019.
“The Bank’s updated Composite Index of Economic Activity (CIEA) also shows evidence of increased economic activity with a yearly growth of 4.0 percent in March 2019, up from 2.9 percent a year earlier," the Governor of the BoG, Dr Ernest Addison said at a press conference on Monday.
He added that the "robust pace of economic activity" is supported by improved sentiments from businesses, following the Ghana Cedi’s recovery from the recent sharp depreciation and favourable growth prospects, even though consumer sentiments weakened slightly as a result of recent increases in prices.
The BoG said in the year to 23 May 2019, the Ghana Cedi cumulatively depreciated by 5.8 percent, compared with 0.2 percent for the corresponding period of 2018.
Against the British Pound and Euro, the Ghana cedi cumulatively depreciated by 4.7 percent and 3.3 percent, respectively, compared with 1.4 percent and 2.6 percent appreciation, respectively, over the same corresponding periods.
