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Business - November 23, 2020

BoG maintains policy rate at 14.5%

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The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) maintained the policy rate at 14.5%.

Dr. Ernest Addison, President of the Bank of Ghana, said at the MPC press conference held in Accra on Monday, November 23: “The Committee noted that after the inflation rate rose to 11.4%, The inflation rate has declined. By October 2020, the inflation rate will reach 10.1%, almost reaching the upper limit.

“Fiscal and monetary policy measures that have increased economic liquidity do not appear to affect inflation, partly because of the output gap. Therefore, the Committee expects these conditions to support inflation to return to its center by the second quarter of 2021.

“Finally, the Committee noted that the overall macroeconomic situation has improved compared to the situation at the last MPC meeting in September 2020.

“The global situation continues to maintain support, domestic inflation is easing, growth prospects are improving, crude oil prices have stabilized, and the total currency has expanded, but the impact on inflation is small. The current account deficit is stable, and the inflow of remittances remains strong. Interest rates remain stable, and the reserve buffer continues to remain strong.

He said: “The main risks are the evolution of the budget deficit and the financing needs to support budget implementation and the uncertainty surrounding the pandemic.”

He added: “In this case, the committee decided to maintain the policy rate at 14.5%.”

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