BoG maintains policy rate at 14.5%

The Central Bank has maintained its monetary policy rate of 14.5%.

This is the second time the regulator has maintained its lending rate to commercial banks in the country after its hike by 100 basis points in November last year.

The Central Bank, in a statement issued on Monday, January 31, 2022, the BoG attributed the maintenance of the policy rate to mainly the 20 percent cut in government expenditure which it expects to help moderate the upside risks to the inflation outlook.

The latest forecast shows that inflation would likely remain above target in the near-term, driven by both external and domestic factors, and only return to target in about four-quarters ahead. The key risks to the inflation outlook include: rising crude oil prices and its transmission to ex-pump petroleum prices and transportation costs, rising global inflation, food price uncertainties, and the fiscal outlook.

The Monetary Policy Committee envisaged this scenario when it raised the policy rate in November 2021 to contain the inherent aggregate demand pressures likely to drive prices in the outlook. The Committee is of the view that the dynamics associated with the November 2021 policy rate hike are yet to be fully transmitted and expects the decisive implementation of the fiscal correction measures, especially the 20 percent cut in expenditure to help moderate the upside risks to the inflation outlook.

“The Committee will continue to monitor the impact of these policy measures and as needed call an extraordinary meeting to re-assess the inflation outlook over the forecast horizon and take the necessary policy decisions accordingly.

Under these circumstances, the Committee has decided to keep the policy rate unchanged at 14.5 percent,” remarked Governor of the Bank of Ghana, Dr, Ernest Addison.

Comments

Fitch Solutions retains 2025 growth rate projection at 4.2%

Fitch Solutions has reaffirmed its projection that Ghana’s economy will expand by 4.2% in 2025. This estimate slightly exceeds the International Monetary Fund’s forecast of 4% and the World Bank’s projection of 3.9%. The UK-based research firm attributes its outlook to historically high gold prices, which are expected to cushion the Ghanaian economy against a global slowdown triggered by rising tariffs. Higher gold prices are anticipated to strengthen government revenue, enhance foreign exchange earnings, and help sustain currency stability. The report also highlights that Ghana is relatively less vulnerable to increasing trade restrictions from the United States, given that its primary exports—gold and crude oil—are not directly affected by the tariffs introduced by President Trump’s administration. Moreover, the US constitutes only about 4% to 5% of Ghana’s total exports. In contrast, Ghana’s trade relations are more heavily oriented toward China and European countries, particul...

BoG injects $20m into FX market to support 11 BDCs

The Bank of Ghana (BoG) has injected $20 million into the foreign exchange market in the latest round of its forward FX auction targeted at Bulk Oil Distribution Companies (BDCs). The intervention, which benefited eleven BDCs, is part of the central bank’s broader strategy to stabilise the cedi and ensure price stability in the petroleum downstream sector. Held on Tuesday, April 29, the auction was priced at a locked exchange rate of GHS 14.28 to the US dollar, with bid offers ranging from GHS 13.85 to GHS 15.55. This move reflects the BoG’s continued effort to deepen forex liquidity and safeguard the domestic fuel supply chain against volatility in global energy markets. By directly supplying FX to BDCs, the central bank seeks to ease pressure on the interbank market, guarantee the uninterrupted flow of petroleum products, and mitigate the pass-through effects of exchange rate fluctuations on fuel prices. The $20 million disbursement forms part of a $120 million programme for th...

Kenpong Travel & Tours Champions Breast Cancer Awareness During Customer Week

As part of activities to mark Customer Week, Kenpong Travel & Tours, a leading travel agency in Ghana, is joining the global fight against breast cancer. October is Breast Cancer Awareness Month, and the company is passionate about spreading hope and support to those affected. At Kenpong Travel & Tours, we believe that travel and exploration can be therapeutic and empowering. That's why we're committed to supporting our customers and the broader community in the fight against breast cancer. We're proud to stand in solidarity with breast cancer warriors and survivors. At Kenpong Travel & Tours, we believe that everyone deserves a chance to explore the world and create unforgettable memories. Let's prioritize health, support one another, and fight against breast cancer," said Kennedy Agyapong, CEO of Kenpong Travel & Tours. Our efforts are focused on raising awareness, promoting early detection, and supporting those affected by breast cancer. We urg...

Kofi Ahovi

Search This Blog