Ghana Monetary Policy January 2017


Ghana: Bank of Ghana maintains policy rate in January

January 23, 2017

At its 20 January monetary policy meeting, the Bank of Ghana (BOG) decided to leave the monetary policy rate unchanged at 25.50%, following the first rate cut in over five years in November.

Regarding the performance of the economy, the Bank stated that tight credit conditions, oil and gas production issues at the Jubilee field and power supply constraints restricted growth in 2016. However, since December’s presidential election and the subsequent peaceful transition of power the Bank has detected increased consumer optimism concerning economic prospects. According to the Bank, this improved consumer confidence, coupled with a boost to oil production this year as new oil fields come on stream, should raise the country’s growth rate going forward. Nonetheless, the BOG highlighted the importance of fiscal consolidation in order to complement the tight monetary policy stance and help temper inflation.

The Bank commented that inflation continued to ease towards the end of last year, aided by tight monetary policy and a more stable exchange rate. The fall in headline inflation was mirrored by a drop in core inflation and inflation expectations of consumers and the financial sector. Headline inflation in 2016 was broadly in line with the Bank’s projection. However, following a higher-than-expected fiscal deficit last year and a rise in ex-pump prices the BOG announced it has tweaked some of its underlying forecast assumptions, meaning that inflation is now expected to return to target in 2018, one year later than previously predicted.

The next policy meeting is scheduled for 24 March 2017.

FocusEconomics Consensus Forecast panelists expect the monetary policy rate to end 2017 at 19.29%. For 2018, panelists project that the monetary policy rate will end the year at 16.50%.

Author:, Economist

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Ghana Monetary Policy Chart

Ghana Monetary Policy January 2017

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

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