Bank of Ghana Holds Policy Rate at 29% Amidst Inflation Pressures

The Bank of Ghana (BoG) has maintained its Monetary Policy Rate at 29 percent, citing a slightly elevated inflation profile due to recent exchange rate pressures and adjustments in transportation fares.

According to Dr. Ernest Addison, Governor of the Central Bank, the decision was made during the Bank's 118th Monetary Policy Committee meeting on Monday. Despite the current inflation pressures, projections show that inflation will remain within the monetary policy consultation clause of 13 to 17% by the end of the year.

The Ghana cedi has been under pressure, resulting in a depreciation of 14.6% against the US dollar as of May 22, 2024, compared to a 21.8% depreciation for the first five months of 2023. Additionally, adjustments in transportation fares are expected to contribute to the elevated inflation profile.

However, the Bank of Ghana remains committed to providing stability in the exchange rate for the cedi and has adequate foreign exchange reserves to support the market. Economic agents are warned against engaging in speculative purchases, as they will suffer economic losses when the correction occurs.

The decision to hold the policy rate at 29% is aimed at balancing economic stability and inflation control. The Bank of Ghana will continue to monitor the economic situation and adjust its policies as needed to ensure economic growth and stability