Ghana: Bank of Ghana keeps policy rate at 22.0% in July
July 15, 2015
At its 15 July monetary policy meeting, the Bank of Ghana (BOG) decided to keep its monetary policy rate at 22.0%, which met market expectations. As a result, the policy rate remains at its highest level on record. The Bank has hiked its policy rate just once since November of last year in order to fight high inflation.
On the domestic front, the Monetary Policy Committee (MPC) pointed out that challenges in the energy sector along with fiscal consolidation and the high cost of doing business in the country continue to drag on GDP growth. For the five months up to April, total revenue exceeded the target while expenditure was broadly on target. The Bank added that, while growth prospects remain positive, energy sector challenges, tight credit conditions and subdued commodity prices continue to be the main challenges to growth over the medium term.
In June, inflation came in at 17.1%, which marked the highest level in over a year. Looking forward, the Bank commented that inflation expectations remain elevated, mainly due to, “the pass-through of the currency depreciation and continuing cost-push inflation.”
Author: Dirina Mançellari, Senior Economist