BoG reduces Policy Rate to 16 percent
The Governor of the Bank of Ghana Dr. Ernest Addison has announced a cut in the policy rate from 17 percent to 16 percent. This represents a 100 basis point drop.
This is the maiden meeting of the Monetary Policy Committee of the Bank of Ghana this year.
The policy rate is the rate at which the central bank lends to commercial banks in the country.
Speaking at a press conference Dr. Addison stated that the decision was taken in line with the current economic conditions and with a forecast to achieve government’s inflation target.
Dr. Addison observed that the economic policies of government are sustainably being implemented hence the decision to reduce the rate.
“The Committee noted that immediate risks to the disinflation path are well contained, and the current conditions provide scope to translate some of the gains in the macro stability to the economy. Under the circumstances, the Committee decided to reduce the policy rate by 100 basis points to 16 percent”.
Additionally, Dr. Addison stated that the steadily decline of inflation from 15.4 percent at the end of 2016, to 11.8 percent in 2017 and further down to 9.4 percent in 2018, supported in large part by non-food inflation also influenced the MPC to reduce the figure.
The Bank’s latest forecast shows that inflation will remain within the target band of 8±2 percent over the forecast horizon, barring any unanticipated shocks.