Dr. Johnson Asiama
The Bank of Ghana (BoG) has maintained its Monetary Policy Rate at 14%, citing rising external factors and some emerging inflationary pressures.
Governor of the Bank of Ghana (BoG), Dr. Johnson Asiamah, who announced this at a press conference following a conclusion of the 130th Monetary Policy Committtee (MPC), in Accra said the decision to maintain the Policy rate was taken although there are signs of continued improvement in the domestic economy.
He said the recent macroeconomic indicators shows an improved economic stability.
This, the committee mentioned, include easing inflationary trends, relative exchange rate stability, and stronger fiscal performance among others.
He, however, indicated that inspite of improved economic conditions, global economic conditions remain uncertain, with external developments still posing potential risks to the country’s inflation outlook and economic recovery.
“Based on the considerations, the committee assessed risks in the outlook to inflation and growth as broadly balanced and decided to maintain the monetary policy rate at 14.0%”.
“The committee will continue to monitor incoming data, in particular relating to potential spillover of the geopolitical tensions to the domestic economy and take appropriate policy actions when necessary,” Dr. Asiama stated.
The committee also noted that rising global inflation could likely compel major central banks to tighten monetary policy again in a bid to reverse capital flows to emerging and developing economies.
“The disruption to trade flows following the blockade of the Strait of Hormuz has led to a sharp increase in international crude oil prices and reignited inflationary pressures in both advanced and emerging market economies,” Dr. Asiama stated.
The committee further stated that maintaining the policy rate at 14% is expected to sustain gains made in macroeconomic stabilisation.
“Relative exchange rate stability, increasing reserve buffers, and continued fiscal discipline are expected to help moderate these upside risks,” the Governor said.
This, the Governor, also explained will enable the Central Bank to closely monitor evolving domestic and international risks despite resilient economy in the first quarter of the year.
“The growth was driven mainly by stronger private sector credit, increased consumption, industrial production, and international trade activities,” he said.
Both business and consumer confidence softened slightly in April due to concerns over the potential domestic impact of the Middle East conflict,” the committee added.
By Ebenezer K. Amponsah