The Bank of Ghana has fixed the country’s monetary policy rate at 23.5 per cent, indicating a 200 basis point reduction from the previous rate of 25.5 per cent.
The new figure was announced Monday by the governor of the Bank, Dr. Abdul Nashiru Issahaku, at the second Monetary Policy Committee meeting for2017.
Dr Issahaku cited the country’s declining inflation among others as reasons for the drop in the policy rate.
“The Committee noted that underlying inflation pressures have eased considerably and inflation is projected to trend downwards the medium term target of 8 plus or minus 2 percent.”
He added: “Recent developments in inflation imply money increasing tightening consequently the MPC has decided to reduce the policy rate by 200 basis points to 23.5 percent.”
The Governor said the confidence of an improved inflation and indication of low growth warranted a reduction of the policy.
“However, there are indications that growth is likely to remain significantly below potential which alongside an improved inflation outlook provides some scope for monetary policy easing.
The governor said the Bank is committed to tighten fiscal policies in ensuring that the stability being enjoyed by the cedi is maintained.
The next MPC meeting is scheduled for May 22nd, 2017.
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