Bank of Ghana raises the monetary policy rate by 300 basis points (3 percent) to 22 percent, citing risks to the inflation outlook.
The Committee also raised the primary reserve requirement of banks from 12 percent to 15 percent to be implemented in a phased manner, that is 13 percent from September 1, 2022; 14 percent by October 1, 2022, and 15 percent by November 1, 2022, a press statement issued by the MPC dated August 17, 2022 has said.
The decision followed a Monetary Policy Committee (MPC), extraordinary meeting held to review recent developments in the economy and assess risks to the outlook.
The Committee took note of the increase in inflation in the month of July and heightened pressures in foreign exchange market and deliberated on the underlying drivers.
Headline inflation accelerated further for the eleventh consecutive month to 31.7 percent in July 2022, from 29.8 percent in June 2022. This was driven by both food and nonfood price pressures. Food inflation rose to 32.3 percent in July 2022 from 30.7 percent in June 2022.
Similarly, non-food inflation increased to 31.3 percent from 29.1 percent in June 2022, contributing 55 percent to the rise in headline inflation in July 2022.
The statement however noted that the to boost the supply of foreign exchange to the economy, the Bank of Ghana is working collaboratively with the mining firms, international oil companies, and their bankers to purchase all foreign exchange arising from the voluntary repatriation of export proceeds from mining, and oil and gas companies.
“This will strengthen the central bank’s foreign exchange auctions,” the statement has said.