The Monetary Policy Committee of the Bank of Ghana on Monday has announced its decision to maintain the monetary policy rate at 20%.
This decision is geared towards ensuring Ghana achieves its medium-term inflation target of 8.2% and maintain the inflation target horizon.
According to the committee, there has been a decline in core inflation throughout 2017 with a 550 basis point policy cut.
“In sum, the Committee noted the increased pace of global growth which is expected to continue in 2018, and the relatively subdued global inflation, supporting broad-based accommodative monetary policy stance across the major advanced economies. This has had a moderating effect on global financing conditions with positive implications for emerging and frontier markets, including Ghana.â€
At a press briefing Monday, the Governor of the Central Bank, Dr Ernest Addison said the move was influenced by fears that inflation could be going up due to current developments on the global market.
“The fiscal consolidation process is on track and it is expected to deliver better than the programmed budget deficit in 2017,†he disclosed.
According to Dr Addison, economic activities have also picked up significantly while private sector credit growth is recovering.
He said the non-oil sector of the economy is also rebounding after a sluggish performance at the beginning of the year.
“This is supported by continued improvement in the economic fundamentals and improved investor confidence.
He revealed that the trends are expected to continue in 2018.
The BoG Governor said the MPC has identified some emerging issues with inflations figures in the last two months of 2017.
“Although inflation expectations appear to be well anchored, under the circumstance and to ensure that inflation target horizon is maintained and a medium-term inflation target of 8 +/-2 percent is achieved, this MPC maintained the policy rate at 20 percent," he said.
Credit: myjoyonline.com