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Ghana Monetary Policy November 2023

Ghana: Bank of Ghana stays put again in November

At its last scheduled meeting of the year on 22–24 November, the Monetary Policy Committee of the Bank of Ghana (BoG) held fire and maintained its monetary policy rate at a record high of 30.00%. The decision marked the second consecutive hold and was in line with market analysts’ expectations.

The decision was driven by the continued deceleration of both headline and core inflation through October. Moreover, inflation expectations cooled in October. Regarding the cedi, the Bank noted that the currency has remained relatively stable against the U.S. dollar since February—supported by the inflow of IMF funds and higher foreign reserves. Lastly, with regard to activity, the BoG noted that domestic economic activity has continued to recover, as shown by high-frequency indicators, giving the Bank room to maintain elevated interest rates to help speed up the cooling of price pressures.

The communiqué was void of explicit forward guidance. The Bank did, however, vow to keep interest rates elevated until the downward trend in inflation is anchored; it is expected to take some time to bring inflation back to the BoG’s 6.0–10.0% target range. As such, the Bank is likely to keep interest rates elevated for some time. All of our panelists believe the Bank’s tightening cycle has now peaked and see interest rate cuts in 2024; some expect the loosening cycle to begin as early as Q1 2024, although the majority does not expect significant cuts until later in the year.

The next monetary policy meeting is set for 23–26 January, with the decision scheduled to be announced on 29 January.

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