Ghana’s Central Bank has raised the country’s current policy rate by 300 basis points to 22%.
The decision follows a meeting of the Emergency Monetary Policy Committee (MPC) today, August 17, 2022.
The action is a part of a plan to address the risks to the forecast for inflation.
However, it is anticipated that borrowing costs would climb dramatically, which will raise the cost of living and corporate operations.
The MPC also took additional measures including raising the primary reserve requirement of banks from 12% to 15% to be implemented in a phased manner.
Therefore, the reserve requirement will go up to 13% from September 1st, 2022 and subsequently to 14% by October 1st, 2022 and then 15% by November 1st, 2022.
To boost the supply of foreign exchange to the economy, the Bank of Ghana, said it is working collaboratively with the mining firms, international oil companies, and their bankers to purchase all foreign exchange arising from the voluntary repatriation of export proceeds from mining, and oil and gas companies.
This it believes will strengthen the central bank’s foreign exchange auctions, and consequently the cedi.
The Bank of Ghana and the MPC kept the policy rate at 19%, citing risks to inflation but balance to growth earlier in July this year.
