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Ghana Monetary Policy November 2020

Ghana: Central Bank decides fourth consecutive hold in November

At its 18–20 November meeting, the Monetary Policy Committee of the Bank of Ghana opted to leave the policy rate unchanged at 14.50%, marking the fourth consecutive hold.

The decision to stand pat was driven by easing inflationary pressures, with inflation nearly returning to the upper band of the Central Bank’s target range of 6.0%–10.0% in October, and a continued improvement in macroeconomic conditions. Moreover, the Bank expects inflation to return to target by the second quarter of next year due to a sizable output gap, leaving it with room to continue its accommodative stance.

The Bank struck a relatively neutral tone in the accompanying press release. That said, it noted that key risks to the outlook stem from the evolution of the budget deficit and the financing needs to support budget implementation—with a “decisive fiscal correction plan” needed next year to contain fiscal risks in the medium term—as well as lingering uncertainty regarding the Covid-19 pandemic.

The next meeting is scheduled for 20–22 January 2021, with the decision to be announced on 25 January 2021.

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