The Monetary Policy Committee (MPC) of the Bank of Ghana has kept its key lending rate to banks at 29%.
This means that the cost of borrowing will not change much in the next two and half months, as it averages 32.7% as of February 2024.
The Governor of the Bank of Ghana, Dr. Ernest Addison addressing the media on March 25, assured that the rate of inflation is under control, and therefore there is no need for further hikes to address it.
“After decelerating sharply in 2023, the pace of disinflation has slowed in the first two months of the year. Although inflation rose slightly in January 2024 and edged down in February, the latest inflation forecast suggests a slightly elevated profile from the possible upward revision in transport fares, an adjustment in utility tariffs, higher ex-pump prices, and some pass-through of exchange rate depreciation.
“Headline inflation declined to 23.2 percent in February, down from 23.5 percent recorded in January 2024. The decline was broad-based, with food inflation down by 0.1 percentage points to 27.0 percent, while non-food inflation declined to 20.0 percent.
“Overall, risks to inflation are slightly on the upside and will require close monitoring, given these considerations, the Committee decided to maintain the Monetary Policy Rate at 29.0%”, the Governor stated.
He said that global headline inflation has continued on a downward trajectory, sustained by tighter monetary policy, which has lowered food and energy prices.
“Notwithstanding this favorable trajectory, developments in the Middle East, especially the Red Sea attacks, have raised concerns about longer delivery times and shipping costs.
“The Red Sea attacks, along with OPEC+ production cuts, have gradually pushed up oil prices in recent weeks, which poses a risk to the disinflation process in both advanced and emerging market economies.”
Read the full statement below: