Ghana Monetary Policy September 2021


Ghana: Central Bank stands pat in September

September 27, 2021

At its meeting on 22–24 September, the Monetary Policy Committee of the Bank of Ghana (BoG) decided to keep its policy rate at 13.50%, as expected by market analysts.

The decision to leave rates unchanged was mainly due to a need to balance both the ongoing economic recovery and inflationary pressures. Although inflation rose to 9.7% in August from 9.0% in July, it nonetheless remained within the Bank’s target range of 6.0%–10.0%. The Bank remarked that while price pressures seem to be picking up, this has been mostly due to fluctuating food prices—as shown by stable core inflation in the same period—and they will most likely ease at the start of the harvest season. Meanwhile, although both national accounts data and high-frequency indicators continue to point towards a sustained recovery, activity remains below pre-pandemic levels, further cementing the BoG’s decision to hold rates steady in order to support the economy.

In its communiqué, the Bank struck a more hawkish tone, stating that “a close monitoring of the inflation situation is […] warranted to respond swiftly to prevent potential second round effects on headline inflation from the rising food inflation”, and that “the Committee stands ready to respond appropriately as needed if this particular risk materializes”. That said, all of our panelists see the policy rate remaining at 13.50% for the rest of the year, with a sizable majority seeing rates on hold through 2022.

Andrew Matheny, economist at Goldman Sachs, is one of those that sees rates staying steady, commenting:

“Overall, our baseline expectation is for the Bank to leave rates on hold until the end of 2022 in an environment of pro-inflationary dynamics globally and domestically, and potential downside risks to the currency.”

The next meeting is scheduled for 17–19 November, with the decision to be announced on 22 November.

FocusEconomics panelists forecast the policy rate to end 2021 at 13.43% and 2022 at 13.75%.


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Ghana Monetary Policy Chart

Ghana Monetary Policy September 2021

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

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