The monetary policy rate has been tightened by 50 basis points by the Bank of Ghana (BoG), raising it to 30 percent.
Following an analysis of recent economic trends by the apex bank, this was decided.
With respect to the previous rate of 29.5% held by the Central Bank in May 2023, this indicates that the cost of borrowing at banks has increased by 0.5%.
Inflationary pressures, according to analysts, will cause a slight increase in the rate.
In his remarks following the 113th Monetary Policy Committee meeting, Dr Ernest Addison, Governor of the Bank of Ghana, attributed the Central Bank’s decision to raise the rate to an increase in inflation.
“…Enhancing revenue mobilisation and aligning expenditures with revenue inflows will be key in forging ahead with fiscal cash elevation efforts to help foster credibility, restore confidence and support the disinflation process and anchor stability. Implementation of the IMF-supported extended credit facility programme for the first six months in 2023 is broadly in line with the performance targets of June 2023. While the programme envisaged a draw-down of the BoG of close to $100 million, the BoG build reserves in excess of $1 billion.
“Regarding the monetary policy consultation clause, inflation as of June 2023 is within the target band, after declining consistently between January to April. Headline inflation increased in May and June on account of a variety of factors including higher food prices, implementation of new tax measures and utility tariff adjustment,” he stated.
