The Bank of Ghana (BoG) has announced a 100 basis points reduction in its Monetary Policy Rate, lowering it from 30 to 29 percent.
Dr. Ernest Addison, the Governor of the Bank of Ghana, revealed that the decision was prompted by a consistent decrease in inflation, dropping from 54.0% in December 2022 to 23.4% in December 2023, despite acknowledging existing downside risks.
Speaking after the 116th Monetary Policy Committee (MPC) meetings held from Tuesday, January 23, 2024, to Friday, January 26, 2024, Governor Addison highlighted the committee’s commitment to sustaining the disinflation process, projecting headline inflation to ease to approximately 13-17% by the end of 2024.
However, he cautioned about potential upside risks to the inflation outlook and emphasized the importance of strict implementation of the 2024 budget and a tight monetary policy stance.
The MPC recognized the emerging economic recovery but stressed the necessity of maintaining a robust policy stance to solidify disinflation gains.
In light of this, the committee decided to implement a 100 basis points reduction, setting the new Monetary Policy Rate at 29.0%.
The MPC’s assessment included a global perspective, noting subdued global growth in 2023 and a temporary pause in monetary policy tightening across major economies due to easing global inflation.
On the domestic front, Governor Addison expressed optimism about the positive outcomes of the current macroeconomic framework supported by the IMF ECF program, citing favorable trends in key macroeconomic fundamentals.
