Ghana Maintains Policy Rate for 3 Consecutive Times

Governor of Bank of Ghana, Dr. Ernest Addison

Accra, Ghana, November 26, 2018/ -The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has maintained its policy rate 17% for third time, citing disinflation pressures, pick up in global inflation and effects of the tight global financing conditions, among others.

The Chairman of the MPC and Governor of BoG, Dr Ernest Addison made the announcement at a press briefing in Accra today. The policy rate is the rate at which the central bank lends to the commercial banks in the country. Keeping the rate at 17% implies that all the commercial banks are expected to keep their interest rates in the country.

Dr Addison explained that; “the disinflation process has continued but at a slower pace. Headline inflation decelerated to 9.5 percent in October 2018, well within the target band of 8±2 percent”.

The decline in inflation observed in the year so far has been driven in large part by a steady decline in non-food inflation, on the back of relatively tight monetary policy stance”.

He added: “Non-food inflation fell by 3.9 percentage points to 9.8 percent in October 2018, the lowest since July 1992. A similar trend was observed in all the core measures of inflation monitored by the Bank of Ghana, indicating easing underlying inflation pressures. Business and financial sector inflation expectations remained broadly unchanged”.

Economic activity continues to pick-up although the trend remains below potential. The Bank’s real Composite Index of Economic Activity (CIEA) recorded an annual growth of 4.2 percent in September 2018, compared with 4.0 percent in the corresponding period of 2017.

This was mainly supported by exports, industrial consumption of electricity, private sector credit expansion, domestic VAT, and key manufacturing sales. The latest business and consumer confidence survey conducted in October 2018 showed some softening of sentiments, according to Dr Addison.

 African Eye Report

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