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BoG maintains policy rate at 21%

Governor of BoG, Dr. Ernest Addison
Governor of BoG, Dr. Ernest Addison

The Bank of Ghana (BoG) has for the first time this year maintained the Policy Rate at 21 percent.

This follows three consecutive reductions from 25.5 percent in January to 21 percent July.

Speaking at a press conference in Accra, the Governor of the Bank of Ghana, Dr. Ernest Addison attributed the decision to maintain the current figure on the relative stability of inflation rate as well as the gradual effect of previous reductions in the policy rate on other macroeconomic indicators.

“The monetary policy stance has eased in line with declining inflation and underlying inflation pressures since the beginning of the year. At this MPC round however, the Committee decided it was time to pause the easing cycle in view of emerging risks to the inflation outlook, while remaining vigilant and committed to respond and take the necessary policy actions should these initial signs of underlying pressures persist. Consequently, the Committee decided to maintain the monetary policy rate at 21 percent,” he said.

He explained that headline and core inflation picked up in August, although inflation expectations declined.

“The committee noted the uptick in core inflation, an indication of emerging pressures, would require further monitoring,” he observed.

Dr. Addison pointed out that since August 2017, there have been upward adjustments in ex-pump petroleum prices which are likely to transmit through prices in the coming months and pose some risks to the inflation outlook.

“These notwithstanding, the latest forecast show that medium term inflation target is achievable in 2018. This forecast is contingent on continued fiscal consolidation and exchange rate stability,” he noted.

By: Lawrence Segbefia/

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