Policy Rate Remains 29%

Dr. Ernest Addison, Governor of Bank of Ghana


The Bank of Ghana (BoG) has maintained its Monetary Policy Rate (MPR) at 29% following a review of some developments in the economy.

Addressing the media at its 117th Monetary Committee Meetings (MPC) in Accra last week, the Governor of the Bank of Ghana, Dr. Ernest Addison said the committee observed a stronger global growth outturn than expected as well as a continued decline in global inflation.

He said the growth momentum was largely supported by resilience in some major advanced economies and emerging markets, as well as a projected rebound in the Euro Area.

According to him, these positive developments were expected with global growth forecast at 3.1 percent, unchanged from 2023 while global inflation  continue to ease on the back of declining food and energy prices and tight monetary policy.

“In the domestic economy, the growth outturn for 2023 was stronger relative to target. The fourth quarter GDP growth of 3.8 percent was driven by all three sectors.

External sector conditions remain positive, with improving reserve buffers. This notwithstanding, the exchange rate came under strong demand pressures in the first few months of the year. Looking ahead, however, inflows from the World Bank, the tight monetary policy stance, and a weaker US dollar from potential policy rate cuts in the US, are expected to support the relative stability of the Ghana cedi,” he said.

He also mentioned that despite the elevated credit risks, Bank’s liquidity and profitability positions have continued to improve adding that out of a total of 23 banks, more than half are fully capitalized and have no need for recapitalization.

The committee noted that most of these banks have met more than two thirds of the required recapitalization over a three-year period within one year as at the end of 2023.

“After decelerating sharply in 2023, the pace of disinflation has slowed in the first two months of the year. Although inflation rose slightly in January 2024 and edged down in February, the latest inflation forecast suggests a slightly elevated profile from the possible upward revision in transport fares, adjustment in utility tariffs, higher ex-pump prices, and some pass through of exchange rate depreciation” he added

Dr. Addison said given the considerations, the Committee decided to maintain the Monetary Policy Rate at 29.0 percent while it closely monitors the overall risks to inflation which is slightly upside.

By Ebenezer K. Amponsah