This is the sixth time the Monetary Policy Committee is maintaining the policy rate at 14.5%
The Monetary Policy Committee (MPC) of the Central Bank on Monday (22 March 2021) maintained the policy rate at 14.5%.
This is the sixth time the Monetary Policy Committee is maintaining the policy rate at 14.5%. The policy rate is indicative of the rate at which the Bank of Ghana lends to commercial banks in the country.
Announcing the decision of the MPC, Governor of the Central Bank, Dr Ernest Addison, said it took the decision based on easing underlying inflation and inflation expectation.
“After declining in January 2021, headline inflation rose in February slightly above the upper band of the medium-term target, driven mainly by non-food prices,” he said.
Dr Addison added: “The bank’s forecast, however, remain broadly unchanged with headline inflation expected to return to the target band in the second quarter of 2021.”
Meanwhile, the Central Bank’s latest confidence surveys conducted in February 2021 showed some softening of both consumer and business sentiments.
“The softening of consumer confidence reflected heightened concerns about the potential re-imposition of restrictions following the upsurge in COVID-19 cases in the first two months of the year.”
According to him, the country’s gross international reserves at the end of February 2021 was US$8,719.7 million, providing cover for 4.2 months of imports of goods.
The reserve level compares with the end-December 2020 position of US$8,624.4 million, which is equivalent to 4.1 months of import cover, according to the Central Bank.