Bank Of Ghana maintains Ghana’s policy rate at 16 percent

The Monetary Policy Committee of the Bank of Ghana has maintained the policy rate at 16 percent.

The Governor of the Bank of Ghana (BoG), Dr Ernest Addison

This is the first time the Bank of Ghana (BoG) has kept the rate this year. It was reduced in January by 100 basis point to 16 percent.

At a press conference to announce the development, the Governor of the BoG, Dr Ernest Addison said the decision was taken to help check interest rates and control prices in the financial sector.

“The Committee was of the view that the monetary policy stance is relatively tight and real interest rates in Ghana are comparatively high. In the circumstances, the Monetary Policy Committee has decided to keep the policy rate unchanged at 16 percent,”.

He added that the MPC will monitor the sector closely and will not hesitate to make immediate and decisive policy actions should these risks they perceive materialize.

He added that the successful conclusion of Ghana’s IMF bailout programme and the need to remain steadfast in the implementation of prudent policies to anchor the hard-earned stability in macroeconomic conditions was a major factor.

“In this respect, the Committee observed that there were risks to the outlook which would have to be monitored very closely. Overcoming these risks would require vigilance and time consistent policy actions”.

He cited for example that in the energy sector, large foreign exchange payments for excess capacity associated with the ‘Take or Pay’ Power Purchase Agreements has contributed to higher demand for foreign exchange hence the need to manage the situation urgently.

The policy rate is the rate at which the Bank of Ghana lends to commercial banks. 

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