Governor of the Bank of Ghana (BoG) Dr Ernest Addion has explained why the Monetary Policy Committee (MPC) decided to keep the policy rate at 29 percent during the 119th press conference on Friday, July 26.
He explained that that on domestic price developments, there is some uncertainty regarding the inflation path for the year, given recent exchange rate pressures, upward adjustment in utility tariffs and increases in ex-pump fuel prices.
The developments, he observed, have resulted in a slightly elevated inflation profile for the year.
Even though inflation is expected to remain within the target year band, he said, the risks are tilted slightly on the upside.
“This will require maintaining the strong monetary policy stance supported by strong fiscal consolidation efforts including remaining vigilant to ensure that the end year inflation objectives are achieved,” Dr Addison said.
He added “Given these considerations, the Committee decided to maintain the policy rate at 29 percent.”
The decision comes after a thorough review of the country’s macroeconomic developments over the past two months.
The stability of the policy rate is anticipated to keep commercial banks’ lending rates to businesses unchanged, providing a consistent financial environment for corporate borrowers.
