The Bank of Ghana (BoG) has, for the third conservative time, reduced the policy rate by 100 basis point after its Monetary Policy Committee (MPC) meeting on Monday.
The Monetary Policy Rate (MPR) is a monetary policy tool of the BoG and it is the rate at which commercial banks can borrow from the central bank.
It communicates the monetary policy stance of government, influence money supply and also guide market interest rates.
According the BoG, given that the downside risks to growth outweigh the upside risks to inflation in the outlook, it was prudent to reduce the policy rate.
Addressing the media in Accra, Dr. Ernest Addison, said committee noted that the pace of economic activity has picked up, driven mainly by growth in private sector credit, improved business sentiments and easing credit stance.
“On inflation, the Committee noted that headline inflation, and inflation expectations have broadly trended downwards. The disinflation process has been supported by tight policy stance and exchange rate stability.
With a stable outlook for exchange rate movements and return to the path of fiscal consolidation, headline inflation is expected to trend towards the medium-term target in 2018, barring any unanticipated shocks,” he said.