The Bank of Ghana (BoG) has, for the third consecutive time, kept the country’s Monetary Policy Rate (MPR) at 29 percent, citing the risk of inflation.
Dr. Ernest Addison, Governor of the Central Bank, announced the rate at a press briefing in Accra on Friday after the end of the Monetary Policy Committee (MPC) meeting.
The Monetary Policy Rate is used by the Bank of Ghana to influence short-term interest rates and control the supply of money in the economy.
The governor explained that though inflation was expected to remain within the target year band of 15 percent, risks were tilted slightly on the upside, with some uncertainty regarding the inflation path for the year.
The BOG Governor said this was due to recent exchange rate pressures, upward adjustments in utility tariffs, and increases in ex-pump fuel prices.
“This will require maintaining the strong monetary policy stance supported by strong fiscal consolidation efforts, including remaining vigilant to ensure that the end-year inflation objectives are achieved,” he said.
The governor said while private sector credit extension steadily improved in the first half of the year, interest rate trends were broadly mixed at the short end of the market.
On the performance of the economy, he stated that provisional Gross Domestic Product (GDP) growth pointed to a strong growth recovery, with a 4.7 percent in the first quarter of 2024, compared with the 3.1 percent recorded in the same period of 2023.
“The key drivers of the growth in the CIEA were the private sector contribution to SSNIT, imports, cement sales, exports, domestic VAT, and tourist arrivals.
Dr. Ernest Addison said in the banking sector, there was an indication of continued recovery from the impact of the Domestic Debt Exchange Programme (DDEP) in the first half of the year. He noted that total banking sector assets grew by 33.3 percent to GH¢323.1 billion at end-June 2024, relative to 21.2 percent growth at end-June 2023, with profitability, liquidity, and efficiency indicators also improving over the period.
