Bank of Ghana raises policy rate to 30%

The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has raised the policy rate by 50 basis points from 29.5 to 30%

The policy rate indicates the interest rate at which the central bank lends to commercial banks in Ghana.

The decision was taken after the committee reviewed the current economic situation as June inflation hits 42.5 %.

Addressing the media on Monday (24 July) , the Governor of BoG, Dr Ernest Addison said decisive action was needed to tackle inflation, which ticked up for two consecutive months.

“In the committee’s assessment, risks to the inflation profile are judged to be elevated driven by second round effects of food prices. Inflation has persistently hovered around 42% throughout the second quarter of 2023 even though central bank financing has been eliminated in the first six months of the year. Ghana’s macroeconomic framework requires decisive tightening from both the fiscal and monetary side to anchor inflation expectations firmly on a declining path.

“Given these considerations and under the current circumstances, the committee has decided to increase the Monetary Policy Rate by 0.5 percent to 30% In the coming months, the committee will monitor closely incoming inflation data and will respond appropriately, if needed, should inflation persist,” the central bank boss said.