Ghana Increases Monetary Policy Rate To 30%

The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has increased the Monetary Policy Rate (MPR) by 50 basis points to 30%.

It is the first hike since March when it was pegged at 29.5%. In May when the Central Bank maintained the policy rate, it said it had in place policies that will continue to cool off inflation.

The new rate was announced on Monday, July 24 following the increase in inflation rates for two consecutive months- 42.2% in May and 42.5% in June.

“After declining consistently between January to April, headline inflation increased in May and June on account of a variety of factors, including higher food prices, implementation of new tax measures, and utility tariff adjustments,” a statement from the bank announcing the rate said.

The BoG explained that although inflation is expected to decline in the near-term, baseline forecasts show a slightly higher elevated profile in the year ahead, which, if not contained, could embed in underlying inflationary pressures.

It added, “It is important that policy responds appropriately and decisively to prevent these risks from becoming embedded and consequently derail the disinflation process.”

The Bank says it will monitor closely incoming inflation data and will respond appropriately if needed, should inflation persist in the coming days.