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Ghana Monetary Policy November 2019

Ghana: Bank of Ghana leaves key policy rate unchanged in November

On 25 November, the Monetary Policy Committee (MPC) of the Bank of Ghana (BOG) decided to hold its key policy rate at 16.00%. The decision was in line with analysts’ expectations and marked the fifth consecutive hold since January’s surprise cut.

Well-anchored inflation and signs of stronger economic activity in the third quarter drove the decision to keep the key policy rate unchanged in November. Inflation logged 7.7% in October (September: 7.6%) and has remained below the middle point of the Bank’s target range of 8.0% plus or minus 2.0 percentage points since the rebasing of the consumer price index in August. Meanwhile, GDP growth appeared to pick up in Q3 on the back of robust private-sector activity and upbeat credit growth.

In its forward-looking guidance, the MPC struck a neutral tone. Although it expects inflation to remain within the 8.0% plus or minus 2.0 percentage-points target band, and economic activity to remain buoyant, concerns over global commodity prices and slower global growth remain key risks to their outlook. As it stands, the large majority of our analysts expects the Bank to lower the key policy rate next year.

The next MPC meeting is scheduled for 22–24 January, with the decision set to be released on 27 January.

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