Bank of Ghana increases policy rate to 29.5%

The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has increased the policy rate to 29.5 percent.

Addressing a press conference in Accra on Monday, March 27, Governor of the BoG Dr Ernest Addison said “To place the economy firmly on the path of stability, it is important that the monetary policy stance be tuned further to re-anchor inflation expectation towards the medium-term target.

“Given these considerations, the MPC decided to increase the Monetary Policy Rate by a 150 basis points to 29.5 percent.”

Dr Addison further said that Ghana was making progress with its engagement with bilateral creditors as part of the process to close a deal with the International Monetary Fund (IMF).

Dr Addison explained that stakeholders in Ghana were expecting the IMF Board to meet on Ghana’s proposal by end of March but that meeting was hinged on obtaining financing assurance from bilateral creditors.

He said that there has been progress made regarding assurance from the creditors.

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Dr Addison said “We were all expecting that the IMF board would have met by the end of March but that is contingent on obtaining financing assurances from the Bilateral creditors.

“Fortunately, there is progress on that front, the official creditor’s committee met last week, and they are looking at a date in April by which time they expect to give the necessary financial assurances.

“Once that is out of the way, once we have signed this Memorandum of Understanding (MoU), and once parliament has passed these new revenue measures we would have completed what they call the prior actions, this is what is needed for the fund to set a date for the Executive Board meeting.”

He expressed optimism that the Board would meet by the end of April.

“So hopefully, if things go as planned by the end of April we should see that executive board meeting taking place.

“We are confident about the outlook, our foreign exchange situation is not dire, we believe that the outlook is not that critical, we have been fairly successful with the gold for reserves programme, we have been able to increase our reserves through the purchases of gold. So it is not as  serious as initially projected.”

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By Laud Nartey||Ghana




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