BoG lowers policy rate to 13.5%, first time since March 2020

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Dr. Ernest Addison--Governor, Bank of Ghana

The Monetary Policy Committee(MPC) of the Bank of Ghana (BoG) has lowered the policy rate for the first time since March 2020 to 13.5 percent from 14.5 percent.

According to the committee, it took the decision to help achieve its inflation target.

“Under these circumstances, the Committee decided to lower the Monetary Policy Rate by 100 basis points to 13.5 percent. The Committee will continue to monitor price developments closely and take appropriate action, where necessary, to contain all potential pressures to the inflation outlook,” Governor of the Bank of Ghana, Dr. Ernest Addison said at a press briefing.

The policy rate is the is the cost at which the central bank lends to commercial banks in the country.

Dr. Addison said the headline inflation eased sharply to within the medium-term target band, driven mainly by lower food prices and base drift effects, a tight monetary policy stance and stable exchange rate conditions.

“Since the initial shock to inflation in April 2020, the forecast showed that inflation will be close to the central target by June 2021. These forecasts remain broadly unchanged and inflation would remain within the target band in the next quarter”.

He stated that risks to the inflation outlook appear muted in the near-term, but pressures from mostly rents and transport fares, would require some monitoring to anchor inflation expectations.

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