Ghana Monetary Policy March 2016


Bank of Ghana keeps policy rate unchanged in March

At its 21 March monetary policy meeting, the Bank of Ghana (BOG) decided to keep its monetary policy rate unchanged at 26.00%, thus leaving the rate at its highest level on record. The decision met market expectations and came amid a better inflation outlook.

On the domestic front, the Monetary Policy Committee (MPC) commented that the latest indicators of consumer and business confidence on general economic conditions are somewhat optimistic. Nevertheless, general growth conditions remain subdued due to tight monetary policy, low credit growth and electricity shortages. The Bank also added that the current account deficit shrunk last year on the back of an improvement in the services account.

In February, inflation declined from 19.1% in January to 18.5% due to lower non-food inflation. Looking forward, the Bank considers that, “the risks to inflation and growth outlook as balanced. Hence, there is the need to maintain the current monetary policy stance which together with fiscal consolidation would help bring inflation further down.”

FocusEconomics Consensus Forecast panelists expect the monetary policy rate to end 2016 at 20.25%. For 2017, panelists project that the monetary policy rate will end the year at 18.33%.

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Ghana Monetary Policy Chart

Ghana Monetary Policy March 2016 0

Note: Monetary Policy Rate in %.
Source: Bank of Ghana (BOG).

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