The Monetary Policy Committee of the Bank of Ghana has increased the policy rate by 1 Hundred and 50 basis points to 29.5 per cent.
This means interest rates will go up and affect the mode of borrowing by commercial banks and businesses.
At a news conference, the Governor and Chairman of the Committee, Dr Ernest Addison said, the decision was borne out of global happening coupled with Ghana’s debt to restructure its debt having completed the Domestic Debt Exchange Program.
” Under the staff-level agreement, the bank of Ghana and the Ministry of Finance have finalised an MOU on zero financing to the budget which would be signed shortly.
The passage of the relevant revenue bills by parliament will therefore conclude the required prior actions to advance Ghana’s program to the IMF executive board.
This will be critical in resetting the economy on the path of recovery.
Headline inflation has declined marginally for two consecutive months, but continues to remain relatively high compared to the medium term.
To place the economy on the path of stability and reinforce the pace of disinflation, it is important that the Monetary policy stance be tuned further to reactor inflation expectation needs towards a medium-term target.
Given these considerations, the MPC decided to increase the Monetary Policy rate by 150 basis points to 29.5 per cent,” He said.
Dr Addison reveals that the country is finding other fiscal measures to deal with the current inflationary pressures.
He adds that the Committee will continue to monitor development in the banking sector and deploy other tools to ensure financial stability.
