Bank of Ghana maintains policy rate at 29%

The Bank of Ghana (BoG) has announced that it will maintain its Monetary Policy Rate at 29 per cent, despite recent exchange rate pressures and adjustments in transportation fares. The decision was made during the Bank’s 118th Monetary Policy Committee meeting in Accra on Monday, May 27.

Dr Ernest Addison, Governor of the Central Bank, stated that while inflation is slightly elevated, projections show that it will remain within the monetary policy consultation clause of 13 to 17 per cent by the end of the year. The decision to maintain the policy rate was reached after a thorough assessment of global and domestic macroeconomic developments for the first four months of the year.

Dr Addison highlighted that the interbank weighted average rate has increased, while average lending rates of banks have declined marginally. He emphasized the importance of sustaining a tight monetary policy stance, including aggressive liquidity management operations.

In terms of the banking sector, indicators show a recovery from the impact of the Domestic Debt Exchange Programme (DDEP). Total assets have increased significantly, and banks have reported higher profits for the first four months of 2024 compared to the same period in 2023.

The country’s gross international reserves remain strong, with a $6.59 billion stock representing three months of import cover. However, Dr Addison cautioned that expenditures have outpaced revenue growth in the first quarter, emphasizing the need for strict fiscal discipline for the rest of the year to strengthen confidence in the economy.

Overall, the decision to maintain the Monetary Policy Rate reflects the Bank of Ghana’s commitment to ensuring stability and growth in the country’s economy amidst various challenges.