The Bank of Ghana (BoG) has decided to keep the policy rate steady at 29 percent, reflecting its continued efforts to stabilize the economy amidst persistent inflation and global economic uncertainties.
During the recent Monetary Policy Committee (MPC) meeting, the BoG emphasized its cautious approach to balancing economic growth and inflation control. This decision was officially announced by Governor Dr. Ernest Addison at the 118th MPC press briefing on May 27, 2024, following a review of the country’s macroeconomic developments over the past two months.
The policy rate, which is the interest rate at which the central bank lends to commercial banks, is a crucial instrument in the BoG’s monetary policy toolkit. By maintaining this rate, the BoG aims to manage inflation while ensuring economic stability.
Ghana’s inflation rate has remained high due to factors such as rising food and energy prices, currency depreciation, and global economic disruptions. Currently, inflation hovers around 40 percent, significantly exceeding the central bank’s target range of 6 to 10 percent.
By keeping the policy rate at 29 percent, the BoG underscores its commitment to containing inflationary pressures. This high rate is designed to make borrowing more expensive, thereby reducing spending and investment, which should help bring down inflation. The BoG’s decision highlights its focus on safeguarding the purchasing power of Ghanaians and maintaining economic stability in these challenging times.
