BoG keeps policy rate at 20% due to inflation fears

The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has maintained the policy rate after meeting last week to review the health of the economy.

The Committee kept the rate at which it lends to commercial banks at 20 percent.

At a press briefing Monday, the Governor of the Central Bank, Dr Ernest Addison said the move was influenced by fears that inflation could be going up due to current developments on the global market.
“The fiscal consolidation process is on track and it is expected to deliver better than the programmed budget deficit in 2017,” he disclosed.

In an interview with Joy Business’ George Wiafe, he explained that this was because “expenditures were properly aligned to address shortfalls in revenues.”
According to Dr Addison, economic activities have also picked up significantly while private sector credit growth is recovering.



He said the non-oil sector of the economy is also rebounding after a sluggish performance at the beginning of the year.

“This is supported by continued improvement in the economic fundamentals and improved investor confidence.

He revealed that the trends are expected to continue in 2018.

The BoG Governor said the MPC has identified some emerging issues with inflations figures in the last two months of 2017.

“Although inflation expectations appear to be well anchored, under the circumstance and to ensure that inflation target horizon is maintained and a medium-term inflation target of 8 +/-2 percent is achieved, this MPC maintained the policy rate at 20 percent,” he said.

Source:Myjoyonline