The Bank of Ghana (BOG) has announced that it will maintain its monetary policy rate (MPR) at 29% for the third time this year.
This decision was announced by the Governor of the Bank of Ghana, Dr. Ernest Addison, during the 119th monetary policy meeting held earlier today.
According to Dr. Ernest Addison, the decision to maintain the rate is aimed at sustaining the tight monetary policy stance and ensuring that the end-year inflation rate is achieved despite uncertainty surrounding the macroeconomic indicators.
“Even though inflation is expected to remain within the target year path, the risks are tilted slightly on the upside. This will require maintaining a strong monetary policy stance supported by strong fiscal consolidation efforts, including remaining vigilant to ensure that the end-year inflation objectives are achieved.”
He further noted that the committee decided to keep the monetary policy rate at 29% due to the Ghana Statistical Service’s upward revision of the Gross Domestic Product (GDP) growth rate, stronger economic activity, and exchange rate stabilization.
“Economic activity remained resilient in the context of a generally tight policy stance. This is shown by the latest GDP data released by the Ghana Statistical Service and the subsequent upward revision of growth estimates. Similarly, high-frequency indicators of economic activity, which are more recent, suggest stronger growth outcomes.”
“Consumer and business confidence sentiments softened, driven by the rapid exchange rate depreciation observed in May and high food prices in June 2024. As the exchange rate stabilizes and macroeconomic stability takes hold, the reversal of these sentiments will further help support economic activity.”
“Given these considerations, the Committee decided to maintain the policy rate at 29 percent.”
Story by: Alexander Kuuku Osei-Baidoo | univers.ug.edu.gh
