How BoG Intends to Cool Off Inflation
With the high inflation inevitably tailored with the recent depreciation of the cedi against major trading currencies on the global market, the Central Bank has outlined its measures to cool it off on the local market.
The cedi is trading at GHC15.15 per a dollar, GHC19 to the pound sterling and GHc16.30 to the euro as of May 22, 2024.
Ghana’s inflation rate currently stands at 25%; however, the cedi’s woes are envisioned to increase inflationary digits, impacting the lives of ordinary Ghanaians.
The BoG intends to leverage on Open Market Operations (OMO) to cool off inflation.
“This includes mopping up excess cedis from the economy to ensure that it doesn’t push up demand for forex trading and demand for good and service,” it said in some infographics posted on X as it explained that inflation hinges on more money chasing fewer goods.
Another tool it intends to use is the issuance of securities.
“Commercial Banks buy these bills (securities) and the Bank of Ghana pays monetary policy rate at interest.”
After maintaining the policy rate at 29% since January, it is unknown if the next Monetary Policy Committee meeting would witness an increase.
Meanwhile, the Finance Ministry is seeking to deal with the steep cedi fall with some loan disbursements expected in the country soon.
