BoG Maintains Policy Rate At 29%

The Bank of Ghana (BoG) has announced its decision to maintain the Monetary Policy Rate (MPR) at 29% for the second time this year. This was disclosed by Dr. Ernest Addison, Governor of the Bank of Ghana, during the 118th monetary policy announcement on Monday, May 27, 2024.

Dr. Addison stated that the decision to keep the rate unchanged is aimed at sustaining a tight monetary policy stance and enhancing liquidity management operations. He pointed to several positive economic indicators that influenced this decision, including a significant buildup of foreign exchange reserves, fiscal policy consolidation, and effective external debt structuring.

Since the commencement of the International Monetary Fund (IMF) programme, Ghana has accumulated approximately $2 billion in foreign exchange reserves. This robust accumulation, alongside the significant progress in fiscal policy consolidation and external debt structuring, has contributed to the stability of the exchange rate.

The Governor also highlighted that the latest forecasts indicate a slight increase in inflation, primarily due to adjustments in transportation services. However, he expressed confidence that inflation will remain within the target range set by the monetary policy.

Maintaining the policy rate at 29% means that commercial banks will continue to use this rate as a reference for lending. This could influence borrowing costs for businesses and individuals, potentially impacting economic growth. The sustained rate reflects the BoG’s commitment to managing inflation and ensuring economic stability.