BoG Maintains Policy Rate at 29% for the Third Consecutive Time
Bank of Ghana Keeps Interest Rate Steady Amid Economic Uncertainty
In its 119th meeting, the Bank of Ghana (BoG) has decided to keep the Monetary Policy Rate (MPR) unchanged at 29%. This marks the third consecutive meeting where the rate has been held steady.
What is the Policy Rate?
The policy rate, set by the Central Bank, is the interest rate at which commercial banks borrow from the Central Bank. It serves as a crucial tool for controlling short-term interest rates and managing the money supply within the economy.
Governor’s Statement
BoG Governor Dr. Ernest Addison announced the decision, emphasizing that while core inflation measures and inflation expectations have been declining, caution remains necessary due to macroeconomic uncertainties.
“Despite a stronger-than-expected GDP growth in the first quarter of 2024 and resilient economic activity, we must remain vigilant,” Dr. Addison stated. “High-frequency economic indicators and the latest GDP data show stronger growth outcomes, yet consumer and business confidence have been impacted by rapid exchange rate depreciation and high food prices.”
Economic Outlook
Dr. Addison highlighted that while inflation is expected to stay within the target range, there are slight upward risks. He stressed the need for strong monetary policy and fiscal consolidation efforts to achieve end-year inflation objectives.
Looking Ahead
As the exchange rate stabilizes and macroeconomic conditions improve, a reversal in confidence sentiments could further support economic growth. The BoG’s decision to maintain the policy rate underscores its commitment to ensuring economic stability amidst ongoing challenges.
Stay tuned for further updates on economic policy and financial conditions from the Bank of Ghana.
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