The Bank of Ghana(BoG) has maintained the policy rate at 26 percent again.
The Monetary Policy Committee of the central bank attributed the decision to the reduction in inflation which currently stands at 18.4%.
Speaking at a press conference in Accra, the governor of the BoG, Dr. Abdul Nashir Issahaku explained that inflationary trends for the first half of the year influenced the decision to maintain the rate.
He cited for example that cost push inflation largely caused an increase in the prices of petroleum products, utility prices and foodstuff in the period under review.
Dr. Issahaku stated that the current economic indicators support the policy rate being maintained.
This is the fourth consecutive time that the MPC has maintained the policy rate.
At the Committee’s last meeting in May, it attributed the the rate to prevailing inflationary trends and the relative stability in the depreciation of the cedi as the major reasons for maintaining the rate.
Meanwhile the central bank says its inflation forecast suggest a slight outward shift due to the increase in ex-pump prices.
“The bank’s latest inflation forecast suggest a slight outward shift in the forecast horizon as increases in ex-pump prices of petroleum products slowed the pace of expected inflation therefore headline inflation is expected to move within the medium term target band of 8 plus or minus 2 in the third quarter of 2017,” he observed.
Though the Governor in May was optimistic of achieving the BoG’s inflation target of 8 percent plus or minus 2, he expressed concern over risks such as petroleum price hikes and utility price hikes.
By: Norvan Acquah-Hayford/citibusinessnews.com/Ghana