BOG’s Policy Rate Remains At 14.5 % As Central Bank Assures Good Prospects For Recovery

The Monetary Policy Committee (MPC) of the Bank of Ghana has maintained the policy rate at 14.5 per cent, citing improved outlook to growth and inflation.

Addressing a press conference in Accra, Dr Ernest Addison, the Governor of the Central Bank, said the drivers of economic growth were returning to normal with prospects for a good recovery.

However, he said the gains were at the cost of moving away from the consolidation path, which could pose a risk to long-term macroeconomic stability if decisive measures were not taken to define a feasible fiscal adjustment to stabilise the debt.

Dr Addison said the latest staff forecast showed a somewhat improved outlook compared to the last MPC, and in the absence of unanticipated shocks, inflation should return to the medium-term target of by the second quarter of 2021.

Dr Addison said headline inflation, after peaking at 11.4 per cent has eased to 10.5 per cent, slightly above the upper band target.

He said underlying inflation and inflation expectations are easing.

On the real economy, he reassured the investment and financial community that the local banking sector is liquid, well capitalized and well positioned to support economic growth in the country.

On the domestic front, he said the attacks on bullion vans in the country is a matter the BOG has taken seriously and revealed plans to contain such negative incidents on the bank’s business.

The Governor said with the easing of the COVID-related food price pressures and continued stability in the exchange rate, a gradual and steady return of inflation to target is anticipated over the horizon.

In sum, the global economy has begun to show signs of recovery.

By: Isaac Clottey

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