Rédaction Africa Links 24 with Ghanaian Times
Published on 2024-03-26 06:51:21
The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) announced yesterday that they have decided to maintain the policy rate at 29 percent. This decision was made in consideration of the current economic stability both domestically and globally. The policy rate represents the rate at which the BoG lends to commercial banks in the country.
Dr. Ernest Addison, the Governor and Chairman of the MPC, shared this information in Accra following the 117th meeting of the MPC. He mentioned that the Committee took into account the positive growth outcomes in the domestic economy. Specifically, the fourth-quarter Gross Domestic Product (GDP) growth of 3.8 percent was driven by improvements in all sectors including services, agriculture, and industry. Additionally, the Composite Index of Economic Activity (IEA) showed further improvement in January, reflecting a rebound in economic activity.
Dr. Addison also noted that there have been improvements in sentiments, as evidenced by an uptick in the Purchasing Manager’s Index (PMI) which reflected increased business purchasing activity and new orders. Headline inflation has also remained relatively stable, with a slight decline from 23.5 percent in January to 23.2 percent in February. This decline was seen across food inflation, which decreased to 27.0 percent, and non-food inflation which fell to 20.0 percent. Core inflation, excluding energy and utility costs, also slowed down to 24.0 percent in February.
Regarding the decision to maintain the policy rate, Economist and Lecturer at the University of Ghana, Dr. Adu Owusu Sarkodie, expressed that he was not surprised by the new rate. He emphasized the importance of controlling inflation, especially given the uncertainties in the global economy. Dr. Sarkodie highlighted the need for the policy rate to remain steady to preserve the strength of the local currency and the capital of businesses.
In conclusion, the decision to maintain the policy rate at 29 percent reflects the BoG’s commitment to ensuring economic stability and controlling inflation. The positive growth outcomes in the domestic economy and improvements in various economic indicators informed this decision. It will be crucial for the BoG to continue monitoring economic developments both domestically and globally to make informed decisions regarding the policy rate in the future.
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