The Monetary Policy Committee of the Bank of Ghana has kept the policy rate unchanged at 30 percent for the third consecutive time this year.
The decision is based on core inflation measures trending downwards with the disinflation path expected to ease further.
“Headline inflation has continued to decelerate in the past few months consistent with forecasts. The latest Bank forecast indicates that the disinflation process is expected to continue, supported by the current tight monetary policy stance, relatively stable exchange rate, and base drift effects,”
“All the core measures of inflation and inflation expectations are pointing downwards, and the Bank will remain vigilant on risks to the disinflation process.”
“The Committee noted that although inflation is decelerating, it remains high relative to target. Therefore, there is a need to keep the policy rate tighter-for-longer until inflation is firmly anchored on a downward trajectory towards the medium-term target. Given these considerations, the Committee decided to maintain the monetary policy rate at 30.0 percent”
This was announced by Central Bank Governor, Dr Ernest Addison at the 115th press briefing held in Accra on November 27, 2023.
He further pointed that the implementation of the 2024 budget thus far has been strong in reflecting the attainment of fiscal targets under the IMF programme for the first review.
Dr Addison also noted that the 2024 budget statement has been designed to reinforce the ongoing fiscal consolidation.
In addition to the policy rate decision the BoG Governor announced further policy measures to address excess structural liquidity conditions in the market and provide additional impetus to the disinflation process.
They include: • Unify the currency holding for the Cash Reserve Ratio requirement on foreign currency
denominated deposits and domestic currency deposits for banks.
• The new unified Cash Reserve Ratio for total deposits (cedi and foreign currency) – are to be held in cedis – and this is therefore being reset to 15 percent effective 30th November 2023.
The Central Bank said the MPC will continue to monitor developments in the banking sector and deploy other policy tools, as and when required, to support stability.