BoG maintains policy rate at 29%

The Bank of Ghana (BoG) has maintained its Monetary Policy Rate (MPR) at 29 per cent.

This comes as the International Monetary Fund (IMF) warned Central Banks to be careful when cutting interest rates as looser monetary policy could push inflation up further.

This is the first time the BOG is maintaining the rate in 2024.

At its 117th monetary policy announcement on Monday, March 25, 2024, the Governor of the Bank of Ghana, Dr. Ernest Addison cited the need to closely monitor the current inflation trend as risks remain elevated.

“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 added, “Broadly, the banking sector remains stable, despite the elevated credit risks. Bank’s liquidity and profitability positions have continued to improve. Out of a total of 23 Banks, more than half are fully capitalised and have no need for recapitalisation. Most of the outstanding banks have met more than two thirds of the required recapitalisation over a three-year period within one year as at the end of 2023.

“Fiscal policy implementation so far has been broadly consistent with targets under the IMF ECF-supported programme. Although the primary fiscal balance target for 2023 was attained, the fiscal assessment is made on commitment basis. This will require vigilance to ensure that commitment control is effective in 2024. Although inflation rose slightly in January 2024 and edged down in February, the latest inflation forecast suggests a slightly elevated profile.”

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