BoG Maintains Policy Rate At 26% As Inflation Slows Down

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The Monetary Policy Committee (MPC) of the Bank of Ghana (BOG) has maintained its policy at 26 percent.

The monetary rate is the rate at which the central bank lends to commercial banks, it also used by banks to calculate their base rate.

Prior to the rate being maintained there were mixed views on whether the BoG should go ahead to increase the rate this time round due to the continuous hikes of inflation and the cedi’s instability.

The last time the rate was increased, which was last year, the bank of Ghana at the time attributed the move to high inflationary trends and the cedi’s instability.
Inflation currently stands at 17.7 percent.

But addressing the press after concluding deliberations on the economy Governor of the Bank of Ghana Dr Henry Wampah said the rate was maintained following a reduced pace noticed in inflationary trends.

‘The committee has decided to maintain the policy rate at 26 percent.

The latest release by the Ghana Statistical Service puts inflation at 17.7 percent in December 2015 up marginally from 17.6 percent in November and 17.4 percent in October.

This indicates some moderation in price movements over the previous month the slower pace of inflation reflects the tight monetary policy stance and ongoing fiscal consolidation.

In addition our latest survey shows inflation expectations has broadly moderated’.

The IMF in its latest review report on Ghana gave the BoG its blessing for a policy rate hike in order to tame inflation.

The 26 percent is one of the highest in the history of the country.

The last time the figure went that high was in January 2003 when it was pegged at 25.50 percent.

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