Ghana Monetary Policy November 2018


Ghana: BOG keeps the key rate at 17.00% in November

November 26, 2018

At its three-day meeting concluding on 26 November, the Monetary Policy Committee (MPC) of the Bank of Ghana (BOG) decided to keep the policy rate on hold at 17.00%. The decision marked the third consecutive meeting with no change to the policy rate and was in line with the expectations of most market analysts. As a result, the rate will close this year at the lowest rate since January 2014.

The Bank’s decision came against the backdrop of increasing risks to the inflation outlook. While headline inflation fell to an over five-year low of 9.5% in October (September: 9.8%) and is forecasted to remain within the Central Bank’s medium-term target range of 8.0% plus or minus 2.0 percentage points, the BOG remained cautious about underlying pro-inflationary pressures. Ongoing global trade conflicts, higher global inflation, a stronger U.S. dollar and additional U.S. interest rate hikes point to increased risks to the inflation outlook, which are only partly offset by declining crude oil prices.

In its communiqué, the Bank also noted the sustained weakness of the cedi, largely due to a stronger U.S. dollar. As such, the decision to hold the rate should help the BOG stabilize the cedi, which has depreciated against the dollar faster than forecasted by the Bank so far this year. Lastly, the Bank stressed the need for “more effective monetary and fiscal policy coordination” to ensure macroeconomic stability as the country completes its cooperation program with the IMF.

The next MPC meeting is scheduled for 23–25 January, with the decision set to be released on 28 January.

Ghana Interest Rate Forecast

FocusEconomics panelists expect the policy rate to end 2019 at 15.70% and 2020 at 14.17%.

Author:, Research Team Manager

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Ghana Monetary Policy Chart

Ghana Monetary Policy November 2018

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

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