The Bank of Ghana’s (BoG) Monetary Policy Committee has maintained the policy rate at 29%.
During a media briefing, Dr. Ernest Addison, the BoG Governor, highlighted that the Committee’s choice aimed to maintain stable inflation.
Dr. Addison clarified that recent exchange rate pressures and adjustments in transportation fares have slightly elevated the inflation forecast.
He stated that projections indicate inflation will stay within the monetary policy consultation range of 13-17% by year-end.
“These forecasts are contingent on sustaining the tight monetary policy stance, including aggressive liquidity management operations. Given these considerations, the committee decided to maintain the Monetary Policy Rate at 29.0 percent”, he said.
Regarding general macroeconomic conditions, he revealed the committee’s belief that while the implementation of policies at the macro and structural reform levels remains consistent and aligns well with the principles of the International Monetary Fund (IMF)-supported program, there is a necessity to prevent the recent currency depreciation from influencing the pricing behavior of businesses and inflation expectations.
He indicated that the robust reserve accumulation of approximately $2.0 billion since the inception of the IMF program, coupled with the substantial disinflation process, considerable advancements in fiscal policy consolidation, favorable current account balances, and notable progress in the external debt restructuring process, have collectively provided sufficient buffers to support the exchange rate.
In terms of fiscal policy, he declared that expenditures surpassed revenue growth in the initial quarter, primarily due to the frontloading of Independent Power Producers arrears payments.
He recommended that maintaining stringent fiscal discipline throughout the remainder of the year would be imperative to bolster confidence in the economy.