MPC maintains policy rate at 25.5%

The Monetary Policy Committee (MPC) of the Bank of Ghana has maintained the benchmark interest rate at 25.5 percent.

Governor of the Central Bank, Dr. Abdul Nashir Issahaku explained that the decision to maintain the policy rate is as result of inflationary pressures which remains high.

This comes after the first meeting in 2017 of the MPC to review trends and happenings within the economy at its 74th meeting which began on Friday Januray 20.

He said at the MPC that, “the Committee viewed the declining trends observed in headline inflation, core inflation and inflation expectations as positive.

Nonetheless, there are concerns regarding the inflation outlook, which could be impacted by the pass-through effects of the recent exchange rate volatility, persistent increases in food inflation and the fiscal outturn.”

He added that, “there is therefore the need to return to the path of fiscal consolidation to complement the tight monetary policy stance to deliver on the medium-term inflation target.”

In November 2016, the MPC voted to reduce the rate at which it lends to commercial banks by 50 basis points to 25.5 percent, after it had remained at 26 percent for over a year.

At the MPC in July, the Governor announced that the central bank has shifted the forecast for single digit inflation to the third quarter of 2017.